The Case Study on Software Development,Inc

question 30

Essay

The case study on Software Development,Inc.(SDI)reviews the introduction of thirty-eight new or revised software packages for the costs of defects.Do an analysis of Table 23.2.If you look at the software introductions with more than fifty defects and those with fewer than twenty-five defects,what general conclusions can you come to concerning the product costs,training costs,prevention costs,and maintenance/service costs of SDI?

Recognize the application of yield management pricing and its importance in maximizing revenue.

Distinguish between cost-plus pricing and standard markup pricing and their applications in business.

Explain the factors influencing the selection of pricing strategies such as time, demand, and capacity.

Recognize the role of market demand and competition in setting pricing strategies.

---

Definitions:

Standard Costs

The practice of assigning an expected cost to products, with the aim of assessing performance by comparing these costs to actual costs.

Direct Labor Time Variance

The cost associated with the difference between the actual hours and the standard hours of direct labor spent producing a commodity multiplied by the standard direct labor rate per hour.

Actual Costs

The real costs incurred in the production of goods or providing services, as opposed to estimated or standard costs.

Standard Costs

Standard costs are predetermined costs to manufacture a single unit or a number of units of a product during a specific period under current or anticipated conditions.