PRICING AND SALES
Date: 2015-10-07; view: 414.
Read and translate the text
II. READING PRACTICE
Before a company can quote a price (or give a quotation) for goods, they must take into consideration all their costs: the production costs, shipping, insurance, etc. The total of all these costs is called the overall cost. The costing is usually done before a model is produced or exported, so the company must calculate (or work out) their overall costs in advance. From these figures they can work out the cost of each model (the unit cost). All these calculations are written on the costing sheet. The company also takes into consideration their profit. They will usually allow a profit margin of at least 10 %. So when a company give a quotation for a model, they have built into the price their overall costs and profit margins.
There are other factors which affect the price of goods, for example of supply and demand. If a product is in demand (many people want to buy it) and not many firms can supply the product, then the company can charge a higher unit price. On the other hand, making goods in large quantities is comparatively cheaper than producing goods in small quantities. If there is a big demand for a model, a company can produce it in large quantities, and they should be able to quote a lower unit price.
Two of the departments in a company which deal with pricing and selling goods are the Sales Department and the Account Department. The Sales staff handle the basic forms involved in selling goods (the order and the delivery or advice note) and the Accounts staff handle the forms involved in charging for goods (the invoice and the statement). The form sent by the buyer requesting goods is the order. The form which accompanies the goods or which is sent to the buyer to tell him to expect the goods is the delivery note (or advice note). The buyer signs the delivery note which is then a receipt for the seller to prove the buyer received the goods.
2.2. Answer the questions to the text "Pricing and Sales"
1. What factors must a company take into consideration before quoting a price for goods?
2. What is the total of all costs called?
3. When is the costing usually done?
4. Why should the company calculate the overall costs in advance?
5. What is the difference between overall cost and unit cost?
6. What profit margin can a company usually allow?
7. What factors affect the price of goods?
8. Under what conditions can a company charge a higher unit price?
9. What is more expensive for a company: making goods in large or small quantities?
10. What departments deal with pricing and selling goods?
11. Which department deals with the order and the delivery note/the invoice and the statement?
12. What is the order?
13. Explain the meaning of “delivery note“.
14. Why does the buyer sign the delivery note?
15. What is called an invoice?
16. What is the statement?
17. What is a transaction?