Channel design options will have varying cost implications and so some analysis will be necessary. Estimates will be required for the cost imposed by each alternative. This might proceed by estimating the costs in a given channel for various sales volumes. In a direct channel this could relate to the number of sales representatives needed [...]
The most popular and traditional pricing strategy in Moldova is price setting based on Total Cost. Since resources were spent on manufacturing, the producer considers that price should include incurred costs plus a standard profit margin. The traditional pricing approach consists of adding a standard fixed extra charge (e.g. +20% + 25%), determined in accordance [...]
The Cost of Goods Sold account, found on the Income Statement, indicates the costs associated with the quantity of units sold during the period. The Balance Sheet account Inventory represents the costs associated with the quantity of unsold units at the end of a period.
The Cost-Volume-Profit analysis is a tool to visualize relationships between revenue, costs, and income. It is the central element of the Variable Costing Model. The Cost-Volume-Profit Chart demonstrates the relationship between Volume and Costs, and therefore, Income.
Costs should be divided into two basic categories:
- Fixed or Variable – depending on whether the costs change with variations in production volume;
Cost Management means (1) knowledge of where, when and what company resources are used, (2) forecast of where, for what and what amount of additional financial resources are necessary, and (3) ability to ensure the highest possible efficiency level of resource use. Cost Management is the ability to save resources and maximize their efficiency.
