Music Trade Review
Issue: 1945 Vol. 104 N. 11 - Page 23
Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
OPA Price Ceilings on Radios and
Phonographs Revised as of Oct. 30, 45
Reconversion pricing methods for
consumer type radios and phonographs
were given in detail by the Office of
Price Administration on Oct. 30, in a
new regulation covering those items at
all levels of sale. The action, effective
October 3€, 1945, covers all new model
radios and supersedes existing regula-
tions and prices affecting these models.
As announced October 11, consumer
prices will be about what they were in'
Mark 1942. Two kinds of adjustment
have been made, however, to iron out
inequities that had crept into the re-
tail price picture at that ime.
Policy Followed
First, where retail prices in March
1942 included excise taxes newly im-
posed in October 1941 at the manufac-
turing level, and pyramided through
to the consumer by means of percent-
age mark-ups at successive levels of
distribution, OPA has reduced these
retail prices to the point where they
include only the original dollar amount
of the manufacturer's October 1941
excise tax. This policy has been con-
sistently followed, on all consumer
items on which new wartime taxes
wer imposed in October 1941.
Second, in cases where retailers, by
March 1942, had established indivi-
dual ceiling's higher than those in the
manufacturer's Ootober 1941 suggested
list of retail prices, OPA has reduced
these prices by the amount of the in-
crease over list. Such, price increases
did n©t represent any actual increase
in acquisition or distribution costs,
but served merely to increase margins
abnormally.
List Prices Rose During War
Through customary retail practices
of giving substantial discounts for cash
payments, generous allowances for
trade-ins, and mark-downs at periodic
bargain sales, consumers normally paid
considerably leas in pre-war years than
the retail prices listed in the manu-
facturers' catalogs, OPA pointed out.
But during the early months of the
war, when production was curtailed
and consumer buying power already
had begun to increase, retail selling
prices of many consumer goods gradu-
ally rose to the higher levels repre-.
sented by the manufacturers' lists,
OPA pointed out. But during the
early months of the war, when pro-
duction was curtailed and consumer
buying power already had begun to
increase, retail selling prices of many
consumer goods gradually rose to the
higher levels represented by the man-
ufacturers' lists, OPA said. Many of
these increases took place before the
price agency was authorized to im-
pose controls.
List prices, not actual pre-war sel-
ling prices, are the basis of the retail
ceilings that have prevailed during the
war, OPA said. On the other hand, in-
creases now being granted to manu-
facturers are based o*i their costs and
sales prices in the months before ma-
terial scarcities and higher production
costs had driven prices above normal
peace time levels. Furthermore, the
manufacturer increases granted do not
compensate for all cost increases since
the beginning of the war, OPA ex-
plained, but normally require a cer-
tain amount of cost absorption on the
part of the manufacturer.
For these reasons, and because sel-
lers can now look forward for many
months to an increasing volume of
goods and a steady demand for all
items offered for sale, distributors and
dealers should be able to absorb with-
out substantial hardship the increases
over 1941 prices that are granted to
manufactuers, OPA said. In may cases,
100 per cent absorption will leave
dealers with realized margins actually
higher than those they enjoyed in
1941, the agency stated.
Pricing Methods
Manufacturer pricing methods as
described in the new regulation follow:
On models the same as those pro-
duced from July to October 1941, the
manufacturer computes his reconver-
sion price on. the basis of his establish-
ed price to distributors ©r to dealers
if he did not sell to distributors. Old
price ranges and increases that may
be added by manufacturer who sold
through distributors are as follows:
Manufacturer's
Estab-
Allowed Increase
lished Price to
on Sales to
Distributors
Distributors
$11 or less
IS per cent
between $11 and $30 . . 1 2 per cent or $1.65,
whichever is more
over $30
lOyi per cent or $3.60,
whichever is more
If the manufacturer dealt only with
dealers in the base period, he com-
putes his new ceilings to dealers as
follows:
Manufacturer's
Estab-
Allowed Increase
lished Price to
on Sales to
Dealers
Dealers
$ 13 and under
15 per cent
between $13 and $35.41.12
per cent
over $35.40
10J4 percent
On new or changed models that are
nevertheless comparable to any they
produced from July to October 1941,
manufacturers calculate their new
prices as follows:
THE MUSIC TRADE REVIEW, NOVEMBER, 1945
The first compute the new ceiling
price of the comparable item, and find
the percentage mark-up it yields over
the current unit direct cost of pro-
ducing the item. Next, they compue
the current unit direct cost of produc-
ing the item. Next, the compute the
curren unit direct cost of producing the
new or changed model, and apply to
this cost the same percentage mark-up
as that found for the comparable item.
Thus if the current unit direct cost
of producing a model on which a re-
conversion ceiling price already has
been established is $6, and the ceiling
price is $9, the mark-up on unit direct
cost is 50 per cent. If the current unit
direct cost of producing a new or
changed model is $6.50, this figure is
marked up by 50 per cent resulting m
a ceiling price for the new of $9.75.
Manufacturers Tag Units
In all cases except one, the manu-
facturer calculates retail ceiling prices,
and tags each unit with this price.
Manufacturers also compute wholesale
prices and notify distributors of their
ceiling prices. The exception is the
case of manufacturers who produce
units under contract with the owner
of a special brand name, who is an-
other radio manufacturer, an automo-
bile manufacturer, or a mail order
establishment. Here the manufacturer
calculates his new ceiling price to the
brand owner, but the brand owner ap-
plies to OPA for resale ceiling prices.
The brand owner must wait for specific
approval, and then tag or list each
unit with its new ceiling price, OPA
said.
Manufacturers
with
established
prices will compute their reconversion
ceilings on comparable models on a
form to be supplied by OPA, and may
begin selling 15 days after mailing the
form without waiting for specific ap-
proval, unless they are notified to the
contrary, OPA said.
New Manufacturer Must Apply
New manufacturers, and old manu-
facturers with models not comparable
to any they produced in the summer
of 1941, will apply for price approval
at the national office of OPA, where
where reconversion ceiling prices will
be established in line with other recon>-
version prices' already set, the agency
said.
OPA may withdraw reconversion
price increases from manufacturers
who fail to maintain approximately
their pre-war "product mix"—that is,
the proportion of low and medium
priced models to those in the higher
price brackets, the agency said. Also,
if any obviously out-of-line prices re-
sult from the application of today's
pricing methods, OPA reserves the
right to readjust them.
OPA Price Ceilings on Radios and
Phonographs Revised as of Oct. 30, 45
Reconversion pricing methods for
consumer type radios and phonographs
were given in detail by the Office of
Price Administration on Oct. 30, in a
new regulation covering those items at
all levels of sale. The action, effective
October 3€, 1945, covers all new model
radios and supersedes existing regula-
tions and prices affecting these models.
As announced October 11, consumer
prices will be about what they were in'
Mark 1942. Two kinds of adjustment
have been made, however, to iron out
inequities that had crept into the re-
tail price picture at that ime.
Policy Followed
First, where retail prices in March
1942 included excise taxes newly im-
posed in October 1941 at the manufac-
turing level, and pyramided through
to the consumer by means of percent-
age mark-ups at successive levels of
distribution, OPA has reduced these
retail prices to the point where they
include only the original dollar amount
of the manufacturer's October 1941
excise tax. This policy has been con-
sistently followed, on all consumer
items on which new wartime taxes
wer imposed in October 1941.
Second, in cases where retailers, by
March 1942, had established indivi-
dual ceiling's higher than those in the
manufacturer's Ootober 1941 suggested
list of retail prices, OPA has reduced
these prices by the amount of the in-
crease over list. Such, price increases
did n©t represent any actual increase
in acquisition or distribution costs,
but served merely to increase margins
abnormally.
List Prices Rose During War
Through customary retail practices
of giving substantial discounts for cash
payments, generous allowances for
trade-ins, and mark-downs at periodic
bargain sales, consumers normally paid
considerably leas in pre-war years than
the retail prices listed in the manu-
facturers' catalogs, OPA pointed out.
But during the early months of the
war, when production was curtailed
and consumer buying power already
had begun to increase, retail selling
prices of many consumer goods gradu-
ally rose to the higher levels repre-.
sented by the manufacturers' lists,
OPA pointed out. But during the
early months of the war, when pro-
duction was curtailed and consumer
buying power already had begun to
increase, retail selling prices of many
consumer goods gradually rose to the
higher levels represented by the man-
ufacturers' lists, OPA said. Many of
these increases took place before the
price agency was authorized to im-
pose controls.
List prices, not actual pre-war sel-
ling prices, are the basis of the retail
ceilings that have prevailed during the
war, OPA said. On the other hand, in-
creases now being granted to manu-
facturers are based o*i their costs and
sales prices in the months before ma-
terial scarcities and higher production
costs had driven prices above normal
peace time levels. Furthermore, the
manufacturer increases granted do not
compensate for all cost increases since
the beginning of the war, OPA ex-
plained, but normally require a cer-
tain amount of cost absorption on the
part of the manufacturer.
For these reasons, and because sel-
lers can now look forward for many
months to an increasing volume of
goods and a steady demand for all
items offered for sale, distributors and
dealers should be able to absorb with-
out substantial hardship the increases
over 1941 prices that are granted to
manufactuers, OPA said. In may cases,
100 per cent absorption will leave
dealers with realized margins actually
higher than those they enjoyed in
1941, the agency stated.
Pricing Methods
Manufacturer pricing methods as
described in the new regulation follow:
On models the same as those pro-
duced from July to October 1941, the
manufacturer computes his reconver-
sion price on. the basis of his establish-
ed price to distributors ©r to dealers
if he did not sell to distributors. Old
price ranges and increases that may
be added by manufacturer who sold
through distributors are as follows:
Manufacturer's
Estab-
Allowed Increase
lished Price to
on Sales to
Distributors
Distributors
$11 or less
IS per cent
between $11 and $30 . . 1 2 per cent or $1.65,
whichever is more
over $30
lOyi per cent or $3.60,
whichever is more
If the manufacturer dealt only with
dealers in the base period, he com-
putes his new ceilings to dealers as
follows:
Manufacturer's
Estab-
Allowed Increase
lished Price to
on Sales to
Dealers
Dealers
$ 13 and under
15 per cent
between $13 and $35.41.12
per cent
over $35.40
10J4 percent
On new or changed models that are
nevertheless comparable to any they
produced from July to October 1941,
manufacturers calculate their new
prices as follows:
THE MUSIC TRADE REVIEW, NOVEMBER, 1945
The first compute the new ceiling
price of the comparable item, and find
the percentage mark-up it yields over
the current unit direct cost of pro-
ducing the item. Next, they compue
the current unit direct cost of produc-
ing the item. Next, the compute the
curren unit direct cost of producing the
new or changed model, and apply to
this cost the same percentage mark-up
as that found for the comparable item.
Thus if the current unit direct cost
of producing a model on which a re-
conversion ceiling price already has
been established is $6, and the ceiling
price is $9, the mark-up on unit direct
cost is 50 per cent. If the current unit
direct cost of producing a new or
changed model is $6.50, this figure is
marked up by 50 per cent resulting m
a ceiling price for the new of $9.75.
Manufacturers Tag Units
In all cases except one, the manu-
facturer calculates retail ceiling prices,
and tags each unit with this price.
Manufacturers also compute wholesale
prices and notify distributors of their
ceiling prices. The exception is the
case of manufacturers who produce
units under contract with the owner
of a special brand name, who is an-
other radio manufacturer, an automo-
bile manufacturer, or a mail order
establishment. Here the manufacturer
calculates his new ceiling price to the
brand owner, but the brand owner ap-
plies to OPA for resale ceiling prices.
The brand owner must wait for specific
approval, and then tag or list each
unit with its new ceiling price, OPA
said.
Manufacturers
with
established
prices will compute their reconversion
ceilings on comparable models on a
form to be supplied by OPA, and may
begin selling 15 days after mailing the
form without waiting for specific ap-
proval, unless they are notified to the
contrary, OPA said.
New Manufacturer Must Apply
New manufacturers, and old manu-
facturers with models not comparable
to any they produced in the summer
of 1941, will apply for price approval
at the national office of OPA, where
where reconversion ceiling prices will
be established in line with other recon>-
version prices' already set, the agency
said.
OPA may withdraw reconversion
price increases from manufacturers
who fail to maintain approximately
their pre-war "product mix"—that is,
the proportion of low and medium
priced models to those in the higher
price brackets, the agency said. Also,
if any obviously out-of-line prices re-
sult from the application of today's
pricing methods, OPA reserves the
right to readjust them.
Future scanning projects are planned by the International Arcade Museum Library (IAML).