engleski

The Importance of Accounting Information about Costs for the Purpose of Pricing Decisions – Evidence from Croatian Companies

Pricing decisions are among the most significant strategic decisions in almost every company, because they directly affect on company's profitability and market share. Accounting literature recognizes several methods for establishing process for products and services, depending on the time horizon for which the prices are set and information regarding certain costs. In today’s globalized business environment, there is very little number of companies that can actually directly affect on prices. Instead, very large number of companies must adjust their prices according to the prices determined on the markets (global, regional or local). This means that the majority of companies must consider their costs in order to adjust to the market conditions and to maintain the required level of profitability. Since companies cannot influence on market prices, the only area in which they have certain influence are their costs. Therefore, modern management accounting develops management accounting instruments and methods for the purpose of cost rationalization and reduction. The costs which can be included in prices are those that add value to products and services for customers. This paper aims to present the theoretical overview of potential methods for pricing decisions in modern business conditions as well as to explore and identify methods for determination of prices applied in Croatian companies from the real sector. In order to achieve the paper objectives, there is analysis of relevant secondary literature sources along with the application of inductive and deductive methods, comparative method and descriptive method. Besides, an empirical survey is conducted in order to explore which methods are applied for setting prices among Croatian companies from the real sector and which cost information are important for pricing decisions as well as which accounting methods are used for cost rationalization and reduction. For the analysis of empirical data, a descriptive statistical method is used.

accounting information; costs; pricing methods; pricing decisions; Croatian companies

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