Question

1. What are the various methods that can be used to analyze distribution costs?

2. Why is it important for the controller to keep track of distribution costs?

3. What steps might a controller take if the distribution costs of a certain product exceed the actual price the customer was being charged?

4. What is meant by the term "standards" in the context of distribution costs?

5. Why is it important to set distribution standards?

6. Once a company has decided to set certain standards, they must maintain and record different types of information. Please discuss the type of information that must be kept track of. Why is this information useful?

Answer 1

PAGE NO DATE L 1) Melthod use to analyse distribution cosks are: 4) Adivity hased 2) Resounces Conaumption method 31 Channel Sales methad coasting 4) Total aggregate cost 2)H s important as distribution cost is distribution cost, the paxt oftotal cost to Reep track * the product, To keep the progit margin constrain intact have a the distribution lost. Distribution cost Should the profit magin f the company on we should justify 3) If the disteibukion cost &xceed the aitual cost the customer two ways a) Decrease the distibution cost, channels 6) Increase the product coct. being chauge. Then theye aree y noducing 4) 3tandard for the cdisteibuton cost Cost is are Standard diseibution mauiketing team hofore set up. the set Channels is. the disteibution

5) There are distribuion Standards Set so that and sete costs because -the management work acordingly not to these the aim to the calulation and analysis the market Aas set those dtandauds that cwill provide better result Cross to the managemint.
6) Good record help the company to protect business, measure performance and profit.

Data can be stored in the physical form or in the electronic form.

Folloing types of the record can be kept by the company-

• Cash book and bank book
• Bank accounts- cheque, bank statement and deposit book
• Employment record - Hour of work, overtime, remmuneration, termination of employment and type of enployment, personal details of workman,
• Occupational trainning record-
• Sales records - Invoices, credit note details for goods returned, collction, discount given, commission given
• Proof of pruchase -cheque butts, receipts, debit note, agreement etc
• work health and safety record - risk register, record of accident/incident, name of key person, trained safety advisor, first aid attendant etc
• Details of stock on hand - stock at the beginning and end of the year
• list of debtors and creditors.
• Capital gain details - record of purchase of assets, record of sale of the assets, commission paid both on sale and puchase, legal expenses,improvement made to the assets
• Depreciation - Cost of capitalisation, method of depreciation and rate of depreciation
• Expenses record - Invoices, agreement for expenses and payment details
• staff and wages record - Wages records, tax payment,sick pay, holiday pay, contract of emploment etc
• Other record - Deposits for utilities, registration certificate.