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cost-plus pricing |
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cost-plus pricing
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Cost plus method: Under the cost plus pricing method, the arm's-length price of a controlled sale of property is computed by adding to the cost of producing the property an amount equal to that cost multiplied by the appropriate gross profit percentage. During the first quarter of 2007, Cyanco had decreased revenues as compared to the first quarter of the prior year, due primarily to a decrease in product sales to customers and the cyclical "lag effect" in its historical cost plus pricing agreements that benefited the prior year quarter. Cost reductions should be somewhat mitigated by moderating benefits from rising copper prices, which have contributed meaningfully to Anixter's margin expansion over the past six quarters due to the company's cost plus pricing model. |
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