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The Costing Formula Suitable for Pricing (Transfer Pricing) Decisions and Maximization of Business Value
[Vhodný kalkulační vzorec s ohledem na rozhodování o ceně (transferové ceně) a maximalizaci hodnoty podniku]

Author

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  • Tomáš Buus

Abstract

This paper deals with different kinds of costing formulas, regarding the price-setting decisions, resp. transfer-pricing decisions and business value maximization. Results of theoretical research show that it is always suitable to separate fixed and variable costs, nevertheless retrograde costing formula is more convenient in competitive environment, whereas dynamic costing is more suitable in the case of monopoly. While reflecting the above, it is also necessary to take into account the multi-layer nature of product, including servicing and extraordinary requirements of customer (e.g. by using activity-based costing). The main determinant of success is not only the type of costing formula used, but also quality and detail of the data in information system.

Suggested Citation

  • Tomáš Buus, 2009. "The Costing Formula Suitable for Pricing (Transfer Pricing) Decisions and Maximization of Business Value [Vhodný kalkulační vzorec s ohledem na rozhodování o ceně (transferové ceně) a maximalizaci ," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2009(2), pages 33-45.
    • Handle: RePEc:prg:jnlcfu:v:2009:y:2009:i:2:id:27:p:33-45
    DOI: 10.18267/j.cfuc.27
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    References listed on IDEAS

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    1. stanley c. w. salvary, 2005. "The Accounting Variable And Stock Price Determination," Finance 0502011, University Library of Munich, Germany.
    2. David T. Dearman & Michael D. Shields, 2005. "Avoiding Accounting Fixation: Determinants of Cognitive Adaptation to Differences in Accounting Method," Contemporary Accounting Research, John Wiley & Sons, vol. 22(2), pages 351-384, June.
    3. Broseta, Bruno & Costa-Gomes, Miguel & Crawford, Vincent P., 2000. "Cognition and Behavior in Normal-Form Games: An Experimental Study," University of California at San Diego, Economics Working Paper Series qt0fp8278k, Department of Economics, UC San Diego.
    4. Costa-Gomes, Miguel & Crawford, Vincent P & Broseta, Bruno, 2001. "Cognition and Behavior in Normal-Form Games: An Experimental Study," Econometrica, Econometric Society, vol. 69(5), pages 1193-1235, September.
    5. Tomáš Buus & Jaroslav Brada, 2008. "On the Necessity of Using Average Cost as a Base for Transfer Price," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2008(3), pages 79-94.
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    Keywords

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    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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