Printit Co provides rapid printing and design services to the public and small businesses. The business, which has 12 employees, operates out of a high street shop which includes office space. The company undertakes 400 to 500 jobs each month. It currently operates a full cost plus pricing system, and as each job is unique it must be priced individually. The accountant, who works part time, is struggling to keep on top of the task of pricing each job. She has suggested that the company should move to a marginal cost plus pricing system as this would make pricing much easier.
Required:
Discuss the advantages and disadvantages for Printit Co of changing to a marginal cost plus pricing system from its existing full cost plus pricing system.