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4099111 - allocation of indirect production costs Setting the right price for a product is really crucial: too high, and customers will meet their own needs; too low, and suppliers won't get paid for the value they are delivering and the effort that went into it. How can suppliers figure out the right premium and the pricing model that will suit their customers? Many otherwise rigorously run companies are disconcertingly lax about pricing. Although a 1 percent improvement in price yields bigger gains in operating profit than a similar improvement in variable costs, fixed costs, or volumes - almost 8 percent on average across the S&P 1000 - companies often base prices on the anecdotal observations of a few vocal sales-people or product managers. However, we see that the demand for effective methods and systems of accounting for activity within an organization is always growing, therefore, it makes sense that companies...

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