Pricing of material issues depends on a large number of factors

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Pricing of material issues depends on a large number of factors. However, the following basic factors must be fulfilled:

(i) The issue price must cover the cost of purchase.

(ii) It must reflect current market price.

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(iii) It should not destabilise costs from time to time.

(iv) It should not lead to adjustment of stock at the end of the accounting year.

(v) It should take into account the policy of management as regards valuing the stock.

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