Southern New Hampshire University
Module Three Homework
Respond with short answers in paragraph form.
1) What are the various methods that can be used to analyze distribu on costs?
The di erent methods used to analyze distribu on cost are cost bene t analysis, source
2) Why is it important for the controller to keep track of distribu on costs? The importance of the controller keeping track of distribu on cost comes from the need to be aware of rising cost of products to make sure the pro t margin is stable. If it cost more to distribute the product than what they are earning for it, then there would be no pro t.
3) What steps might a controller take if the distribu on costs of a certain product exceed the actual price the customer was being charged? The controller would need to reevaluate pricing of the product raising the sales price if need be. They could also check the materials pricing for the product and see if they can nd a cheaper distribu on price on them before passing the cost to the consumer.
4) What is meant by the term "standards" in the context of distribu on costs?
When speaking of standards for distribu on costs, it means the cost is set by the sales and marke ng team before product distribu on. 5) Why is it important to set distribu on standards? These standards set the expecta ons for sales and other aspects of the company. Without the distribu on standards there would be no guidelines and rules to hold employees to and understand the company's goal.
6) Once a company has decided to set certain standards, they must maintain and record di erent types of informa on. Please discuss the type of informa on that must be kept track of. Why is this informa on useful? Detailed record keeping is essen al for mul ple reasons. Keeping track of sales expenses, and produc on cost are a few of the records that are important. Keeping track of these are useful in making sure all money is accounted for and being used to its full poten al. The records help to make decisions on future products and possible business expansio