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

Tracking overhead, Tracking Overhead Jack would have a many task at han...

Tracking Overhead Jack would have a many task at hand if he tried to daily trace all such items of overhead. For example: x     How difficult it would  become to track the "

Calculate the discounted cash flow and net present value, King Airlines ...

King Airlines King Airlines is one of many low-cost airlines in Europe. The managers want to expand the business and have an opportunity to purchase a second-hand plane to op

Profit variances, PROFIT VARIANCES Sales variances are important as the...

PROFIT VARIANCES Sales variances are important as they have a direct bearing on profits earned by the organization.   thus, they can be used as the basis of determining profit

Share capital of a company, A company has an authorized share capital of 25...

A company has an authorized share capital of 250 million divided into 1,500,000 ordinary shares of sh.100 each and 1,000,000 preference shares of sh.100 each. 1,000,000 ordinary sh

Specific oder costing, in what ways does specific order costing differ from...

in what ways does specific order costing differ from process costing

Material price variance (mpv), Material Price Variance (MPV) This may b...

Material Price Variance (MPV) This may be described as the difference amoung the actual price and the standard price of the materials consumed. MPV = Actual quantity used (S

Use the high-low method to determine variable cost per unit, The following ...

The following data is available regarding costs and units: Observation Machine-hours Total Operating Costs January 4,000 $45,900 February 5,000 52,500 March 3,400 44,025 April 4,40

Cash flow statement, In this section we have tried to develop the concept o...

In this section we have tried to develop the concept of flow of funds inside the organization. Starting along with the funds requirement for an organization, we have tried to trace

Prepare the journal entries to record depreciation, Moore Corporation follo...

Moore Corporation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings (the corporation uses the nearest full

Describe time sheets and job cards, (a) Describe briefly how the following ...

(a) Describe briefly how the following are used in the accounting for labour: (i)   time sheets (ii)   job cards. (b) The following details relate to the labour in a produ

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