An empirical investigation of the importance of cost-plus pricing

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Title An empirical investigation of the importance of cost-plus pricing
Author Guilding, Christopher John; Drury, Colin; Tayles, Mike
Journal Name Managerial Auditing Journal
Editor Simon Linacre
Year Published 2005
Place of publication United Kingdom
Publisher Emerald
Abstract Purpose – This paper has two specific objectives: to appraise the relative importance of cost-plus pricing and to develop and test hypotheses concerned with contingent factors that might affect the degree of importance attached to cost-plus pricing. Design/methodology/approach – Data were collected via a mailed survey of UK and Australian companies. Tests were applied and non-response bias was not a threat to the validity of the findings. Findings – A relatively high degree of importance attached to cost-plus pricing is noted, although there appears to be a substantial number of companies that use cost-plus pricing for a relatively small sub-set of products and services. Companies confronted by high competition intensity attach relatively high degrees of importance to cost-plus pricing and manufacturing companies attach a relatively low degree of importance to cost-plus pricing. Originality/value – The paper makes a contribution, given that only two empirical studies with a specific focus on cost-plus pricing were revealed in a literature search covering the last two decades. Additionally, little has been done to investigate the contingent factors affecting the application of cost-plus pricing. The significant role played by competition intensity in connection with accounting system design is observed to be one of the more enduring relationships uncovered by management accounting research. But a somewhat perplexing aspect of this study concerns the failure to find a statistically significant positive relationship between company size and cost-plus pricing.
Peer Reviewed Yes
Published Yes
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Copyright Statement Copyright 2005 Emerald. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.
Volume 20
Issue Number 2
Page from 125
Page to 137
ISSN 0268-6902
Date Accessioned 2006-01-06
Language en_AU
Research Centre Griffith Institute For Tourism
Faculty Griffith Business School
Subject PRE2009-Auditing and Accountability
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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