Price FormationWritten by konstantin otto c. botschkowski
Price Formation The price is formed at market. Increasing price, it lowers sale volume. Increasing publicity, it increases sale volume. Increasing product quality [investing in design], it increases sale volume. In this model of tendencies we have variables: price, sale volume, publicity and product quality. Are missing variables; profit relative to sale amount, profit relative to employed capital and employed capital. As profit is here understood this variable under several focuses [sees below]. In this simple model, of tendencies, we have seven variables. Cost consists of: Production cost, bureaucratic costs, depreciation of project [design], insurance cost, commercial costs and transport cost. 01-00Production cost 01-01Material and components 01-02Labor 01-03Energy 01-04 Depreciation of industrial equipment 01-05 Rent of industrial space 01-06 Allotment Bureaucratic costs Territorial tax 01-07Insurance costs [business risk] Against sinister Against commercial risk 02-00 Depreciation of project [design] of product 03-00 Cost of transport Transport Insurance Taxes [trading] 04-00 Commercial costs Publicity Commissions 05-00 Profit consist in: 05-01 Direct taxes Excise ect... 05-02 Profit of company [gross] Operational profit Not operational profit [positive or negative] 06-00 Company profit income tax ******************************************************** Taxes Direct taxes Company income tax Employees Income tax Shareholders Income tax Tax built-in expenses of consumption of
| | Tendencies of the MarketWritten by konstantin otto c. botschkowski
Tendencies Of The Market The habits change. Formerly, tailor made clothes according to man's body. Today man forms [models] his body according to clothes pattern. In industrial production current is opposed. The standardized products multiply. The amount of standardized products and amount of components of each product increases. Work of production planning is bulkier. The cost needs to be calculated with more accuracy. The periods also demand more accuracy. If components of several production lines dispute same resources periods should be calculated together
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