MKT 300 Chapter 3: Summary Notes
Document Summary
Selling price per unit ( $: margin (%) = total sales revenue($) total cost ($) Purpose: to determine the value of incremental sales, and to guide pricing and promotion decisions. After determining which units to use, two inputs are needed to determine margins: unit costs and unit selling prices: selling prices can be defined before or after various charges are taken. Charges (ie: rebates, discounts, fees, commissions) can be reported as either costs or deductions from the selling price. External reporting can vary from internal reporting (ie: management techniques/preferences versus accounting standards) Therefore, reported margins can vary widely depending on how they are calculated. Certain items can be treated as either deductions from prices or as increments to cost, but not both. The treatment of this item will not affect the unit margin, but will affect the percentage margin: margin as a percentage of costs.