Multiple products, selling costs, and margin management, Cost Accounting

Assignment Help:

Multiple Products, Selling Costs, and Margin Management

Selling charge are oftentimes variable. For instance, a salesperson can be paid a designated percentage of entire sales. Such schemes have potential to be counterproductive in the multiple product setting. For instance, suppose that the company sells two products. Product A has a per unit sales price of $120, and the Product B has a per unit sales price of $100.

A salesperson, earning a commission computed as 5% of total sales, would desire to sell product A. Though, the company is better off when Product B is sold, because it has a advanced contribution impact ($30 vs. $20). As the result of which, when a business manager considers its program of compensation for the sales staff, care must be given to align the interests of sales force and the company. For the previous instance, it may give better sense to tie the commission to the contribution effects insteed than the sales price.

39_multiple products.png

 


Related Discussions:- Multiple products, selling costs, and margin management

Prepare of the final accounts of a business, You are assisting the accounta...

You are assisting the accountant on the preparation of the final accounts of a business with a year-end of 31 December. A trial balance has been drawn up and a suspense account ope

Calculate the allocations and totals, A company wishes to devise a fair mea...

A company wishes to devise a fair means of allocating funds to its four main departments, namely Accounts, Production, Sales and Transport. The total allocation is to be £100,000.

Cost accounting, how does cost accounting differ from management accounting...

how does cost accounting differ from management accounting

Change in fixed cost, Change in Fixed Cost In graph yx shows the exist...

Change in Fixed Cost In graph yx shows the existing profit curve for a company along with a fixed cost OY break=-even point B, margin of safety M; profit SX whereas sales volu

Determine which project is more lucrative - investment , The Zooline Compan...

The Zooline Company (Pty) Ltd is an American based company that focuses on the LSM 8 -10 markets. They do vehicle interiors, raise or lower suspensions and install top end sound sy

Why is the statement of cash flows useful, Explain:- Q Why is the statem...

Explain:- Q Why is the statement of cash flows useful? Q. How is it possible for a company to suffer a net loss for a given year, yet produce a positive net cash flow from opera

Usefulness of variance analysis, Usefulness of Variance Analysis Caref...

Usefulness of Variance Analysis Carefully note that while prices are being charged to production, it can be done at the actual or standard price. For purposes of making varian

Inventory valuation, How the FIFO, LIFO and AW problems can be solved?

How the FIFO, LIFO and AW problems can be solved?

What is life-cycle costing, Consider the following information, prepared ba...

Consider the following information, prepared based on a capacity of 40,000 units: Category Cost per Unit Variable manufacturing costs

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd