How to realize that COS is fixed at €640 per bike and NOT relative to the sales price??
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                                                                                                Anonymous A
                                                                                    
                        on Jul 03, 2023
                    
                             
    
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                                            Question about
                                
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                                                    COS
                                 
    
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                                                                            Cristian
                                    
                                                                    
                                                    
                                                    
                            on Jul 06, 2023
                    Coach
                                                                        Top MBB Coach | Most Awarded ex-McKinsey Coach on the platform
                    
        
        
        
    
    
    
Hi there,
COS reflects the total value of the costs associated with that product.
If I decide to double the price the COS won't change, only the profits will.
Best,
Cristian
                
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                                                                            Ian
                                    
                                                                    
                                                    
                                                    
                            on Jul 03, 2023
                    Coach
                                                                        Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success
                    
        
        
        
    
    
    
Logic.
How much does is cost x factory to produce a bike?
Now, how much does it cost x factory to product the same bike if we double the price in the store?
The same.
This is part of business acumen which needs to be built!
 
                
                    
        
                                                                                                                        
                                                                            Andi
                                    
                                                                    
                                                    
                                                    
                            on Jul 05, 2023
                    Coach
                                                                        BCG 1st & Final Round interviewer | Personalized prep with >95% success rate | 7yrs coaching | Experienced Hires
                    
        
        
        
    
    
    
Hi there,
as Ian mentioned, sales price and cost of sales are unrelated.
- COS can be defined as “the accumulated total of all costs used to create a product or service, which has been sold”
- Whether you increase or decrease the sales price of the bike doesn't change those cost to create the product or servcie
- Hence, should not put them into relation - COS can be regarded fixed in this case.
Hope this helps.
Regards, Andi
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