Comprehensive Product Costing
Select your favorite drink or snack item manufactured by a publicly held company. For this product respond to the following:
- Where is the product manufactured?
- Given the suggested retail price of the company and using a 50%
markup on price at retail, determine the sell price to the
distributor/merchandiser. Review the companys overall gross margin. If
the product is sold direct to the consumer you may apply the gross
margin as calculated. Applying the gross margin percentage to your
product sales price, infer the cost of the product. Present your
calculations in a supporting table.
- Complete the same exercise for a competitors product of the same
type. Present your calculations in a supporting table included in your
- Comment on the differences in cost between the two competitors, and
assert the reason for this difference (e.g., does the company compete on
cost or differentiation?)
- Apply the concept of the value chain to this product. What types of
costs would be relevant for each segment of the value chain for this
- Research a single critical ingredient of your snack and its source.
Do you expect significant increases in the cost of this ingredient over
the next year? Support your response with input from the commodities
market or other economic data.
- What are the opportunities to offset this price increase, maintain
gross margin and offer the product to consumers at the same price
currently? Present your calculations in a supporting table included in
Your paper should meet the following requirements:
- 7-10 pages in length including supporting tables, not counting title and reference pages
- Cite and integrate at least three credible sources.
- Format according to the CSU-Global Guide to Writing and APA Requirements