Report on Cost Analysis: Apple Air Pods and Pricing Strategies

This report provides a cost analysis of Apple Air Pods, examining the product's cost structure, including direct and indirect material and labor costs, and total manufacturing costs. The report also explores different pricing strategies, such as cost-plus pricing and value-based pricing. The analysis includes a breakdown of various costs, such as direct materials, direct labor, indirect materials, indirect labor, marketing costs, and fixed costs. The report concludes that cost analysis is crucial for financial decision-making and recommends that the company consider cost-plus pricing. References to relevant literature on value-based pricing are also included. This report is a valuable resource for understanding the financial aspects of product costing and pricing strategies. The report also includes a detailed table showing the product cost breakdown and another table that shows the cost structure.

Research Based Task
on PS4

Table of Content
 Introduction
 Main Body
 Conclusion
 References

Introduction
This power point presentation is based on analysis of product
cost and cost structure of a particular selected product that is
Apple Air Pods. In the further part of power point presentation
detailed analyses of various kinds of pricing strategies have
been done with benefits and drawbacks.

MAIN BODY
Product cost:
The cost of the product means the cost involved when making a
product. These costs include direct labor, direct materials,
equipment for purchasable manufacturing, and operational
costs for the manufacturing plant. The expense of the goods
may also be called the labor expense needed to provide a
service to a consumer.

Continue...
Herein, below product cost of chosen commodity is mentioned
below in such manner that is as follows:
On the basis of above table, this can be stated that total product
cost is of 360 pounds.
Particulars Amount (All data in pounds)
Direct material 15
Direct labor 20
Indirect material 5
Indirect labor 6
Total product cost 36

Continue...
Cost structure- Cost structure consists of different types of
expenditures incurred by a company, and is composed
primarily of fixed costs and variable costs. Also within an
organization, the cost structure can vary across product
categories, branches, or business units, owing to the different
activities that they do.

Continue...
In regards with above mentioned product, cost structure is
prepared below in such manner that is as follows:
Particulars Amount (All data in
pounds)
Total manufacturing cost 36
Marketing cost 2
Fixed cost 10
Other cost 2
Total cost 50

Continue...
Pricing strategy: When marketing a good or service a company
may use a number of pricing techniques. The price should be
set for optimizing productivity per each unit sold or from the
aggregate demand. It may be used to protect an established
business from potential competitors, raise market share or join
a new market.

Continue...
There are a range of pricing strategies such as:
Cost plus pricing strategy- Cost-plus pricing is a business model
that determines the sales price by attaching a particular profit
margin to a unit cost of a product. One alternative approach of
pricing is value-based pricing.

Continue...
Value based pricing- Value-based market is a pricing technique
that determines costs mainly, but not necessarily, as per the
consumer's expected or projected interest of a good or service
instead of the commodity's expense or historical values.

Conclusion
On the basis of above project report this can be concluded that
cost analysis is one of the effective techniques in order to take
critical actions for financial aspects. Further part of report
articulates about detailed analysis of cost structure. From end
part of report this can be concluded that above company
should consider cost plus strategy.

References
• Garrison, L. P. and Towse, A., 2017. Value-based pricing and
reimbursement in personalised healthcare: introduction to the basic
health economics. Journal of personalized medicine. 7(3). p.10.
• Hwang, T. J., Kesselheim, A. S. and Sarpatwari, A., 2017. Value-
based pricing and state reform of prescription drug costs. Jama.
318(7). pp.609-610.
• Guerreiro, R. and Amaral, J. V., 2018. Cost-based price and value-
based price: are they conflicting approaches?. Journal of Business &
Industrial Marketing.

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