How to realize that COS is fixed at €640 per bike and NOT relative to the sales price??
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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
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!
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
