What is Minimum Price
The incremental cost of making a product is minimum price.
The any amount above that incremental cost would be a contribution to cover the
fixed cost. The minimum price is not calculated for the purposes of charging
that price.
Minimum price
information helps Management to set a price above the minimum price to achieve
desired profit level. If Spare capacity available if entity has more free
credit available then the minimum price may improve the liquidity of the entity.
If the receivable turnover is more than payable turnover.
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