ABSTRACT
The final chapter summarises key areas where management accounting should have an important role in pricing. Most obvious is the technique of financial break-even analysis which is important in calculations of price sensitivity and can be helpful in both international pricing and substitute/complementary goods pricing. It was also demonstrated that management accounting could have a key role at several stages in the evaluation of economic value to customer.
Not surprisingly management accounting should be central in the evaluation of price discrimination based on buyer identity, geography, volume, product and time and, possibly, in the creation and application of price-value maps.
There is a vital application of management accounting in the evaluation of customer profitability and there are related analyses of price and margin leakages and pocket price/margin bands.
Finally, management accountants can support price negotiations by providing cost analysis of the various options that might be offered to value buyers and the minimum cost configuration that should be offered to price and power buyers and to “poker-players” bluffing to gain a low price for a quality product or service.
