Dictionary of Accounting Terms: distress price
distress price
markdown that a firm should accept rather than discontinue its operation under distress conditions. Under these conditions, any contribution that can be obtained to help cover fixed costs may be preferable to ceasing operations altogether. If operations are discontinued, the company will have no contribution available to cover fixed costs and will end up with a huge amount of shutdown costs. A distress price typically would be a variable-cost-plus price.
