richard here, cost accountant (79' spit / colorado).
we are getting into an area of interest to me called cost accounting and
overhead
absorption. many companies do include in their pricing structure
of both goods (ie: the part) and services (ie: shipping & handling)
many types of costs (as well as a profit % of course). some direct costs
(ie: labor and parts), sometimes indirect costs (insurance, benefits,
property taxes, fuel for the company jet, company picnic expenses).
the one to keep in mind is that if a company is going to post a profit,
ALL costs must be covered first. so look at the amounts and rates of
indirect costs a company is incurring, in order to judge the justification
of the mark up and profit margins in their products and services.
shipping is a direct charge, we know it took say 1-2$ in actual shipping
costs. handling is where the fun starts, as a cost accountant could
make a case of say, .5 hrs of overall labor and a small share of overhead
costs,
in order to keep the business running...we see the same situation in
medical care, where two tynol and a cup of water gets billed as 15$
on the insurance forms...some $ for the cup and two pills, a hell of a
lot more $ to cover the overhead of all of the paperwork and other
expenses, in order to run a hospital...my .02 opinion...
> Shipping and Handling is suppose to cover the cost
> of packaging, labeling, and mailing. NOT the fund the staffs company
> picnic or whatever they are charging ludicrous amounts of money for.
>
> Patrick Bowen
>
|