Explain Two Approaches a Seller Can Use to Estimate Variable

question 159

Essay

Explain two approaches a seller can use to estimate variable consideration, and when each approach is likely to be more appropriate.

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Definitions:

Total Costs

The complete cost of production that includes both fixed and variable costs.

Tax

Tax is a mandatory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Software Package

A bundle of software components or programs that are designed to work together to perform a specific function or set of functions.

Cost Plus Pricing

A pricing strategy where the selling price of a product is determined by adding a specific markup to its production cost.