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Anonymous A

on Sep 17, 2019

Global

Calculating costs from price/kg and % of client's purchases

Hello,

Can you please tell me, what formula/koncept is used to get cost of material when I know the price/kg and % of the client's material purchases? I can see from the case that the price/kg is multiplied by the percentage, so for example $80/kg*40%=$32 but I wouldn't be able to come with this step. Could you please advise what the idea behind it is so I would be able to use it next time?

Thank you

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Top answer

Vlad

Coach

on Sep 17, 2019

McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

Your question is completely unclear. If the cost is the % of the price, then you simply multiply the two numbers

Best

Raymont

on Sep 17, 2019

Your question isn't absolutely clear. If you share the question verbatim, I might be of more assitance.

To confirm: you were asked to calculate Cost of raw material. You were given Price/Kg and % of the price that is material purchase.

To me it then seems fairly obvious that the CoM would be the % mulitplied by the price/kg.