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