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An empirical investigation of the importance of cost-plus pricing

Guilding, Chris, Drury, Colin and Tayles, Mike (2005) An empirical investigation of the importance of cost-plus pricing. Managerial Auditing Journal, 20 (2). pp. 125-137. ISSN 0268-6902

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    Purpose – This paper has two specific objectives: to appraise the relative importance of cost-plus
    pricing and to develop and test hypotheses concerned with contingent factors that might affect the
    degree of importance attached to cost-plus pricing.
    Design/methodology/approach – Data were collected via a mailed survey of UK and Australian
    companies. Tests were applied and non-response bias was not a threat to the validity of the findings.
    Findings – A relatively high degree of importance attached to cost-plus pricing is noted, although
    there appears to be a substantial number of companies that use cost-plus pricing for a relatively small
    sub-set of products and services. Companies confronted by high competition intensity attach relatively
    high degrees of importance to cost-plus pricing and manufacturing companies attach a relatively low
    degree of importance to cost-plus pricing.
    Originality/value – The paper makes a contribution, given that only two empirical studies with a
    specific focus on cost-plus pricing were revealed in a literature search covering the last two decades.
    Additionally, little has been done to investigate the contingent factors affecting the application of
    cost-plus pricing. The significant role played by competition intensity in connection with accounting
    system design is observed to be one of the more enduring relationships uncovered by management
    accounting research. But a somewhat perplexing aspect of this study concerns the failure to find a
    statistically significant positive relationship between company size and cost-plus pricing.

    Item Type: Article
    Additional Information: © Emerald Group Publishing Limited
    Uncontrolled Keywords: Cost-plus pricing, Costs, Competitive strategy, Manufacturing systems
    Subjects: H Social Sciences > HF Commerce
    H Social Sciences > H Social Sciences (General)
    H Social Sciences > HF Commerce > HF5601 Accounting
    Schools: The Business School

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    Depositing User: Sara Taylor
    Date Deposited: 30 Jul 2007
    Last Modified: 28 Jul 2010 19:20


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