1) What are the various methods that can be used to analyze distribution costs? 2) Why is it important for the controller to keep track of distribution costs? 3) What steps might a controller take if the distribution costs of a certain product exceed the actual price the customer was being charged? 4) What is meant by the term "standards" in the context of distribution costs? 5) Why is it important to set distribution standards? 6) Once a company has decided to set certain standards, they must maintain and record different types of information

Answer 1

Various methods that can be used to analyze distribution costs are:

a) Activity-based costing

b) Channel sales method

c) Total aggregated cost

d) Resource consumption method

Answer 2

It is important for the controller to keep track of distribution costs because distribution cost enlightens the profit margin of the organization. It is part of total cost. Being an important cost to the company should be a part in evaluation of profit margin.

Answer 3

The steps a controller should take are:

a) Reduce the channels to minimize the distribution cost.

b) The controller should increase the cost of the product.

Answer 4

?Standard? refers to a particular set amount or value for the cost of distribution. Standard Distribution Cost is priorly decided by the management and marketing team. Distribution cost is decided before they set channels of distribution.

Answer 5

To set distribution standards are necessary because it gives guidance to achieve the set goals. Before the performance of any objective management decides the desired outcomes and to achieve that setting standards are important. The transparency between the performance and desired outcome is easily visible and accordingly, employees perform their duties.

Answer 6

List of the records company can maintain

a) Details of Employees

b) Sales Record

c) Safety record

d) Bank account and its details

e) Training and Development Records

f) Customer complaints record or Grievance cell records

g) Performance records

All these records should be maintained by an organization because these are the most classified and important details of the company. These records are useful at the time of any unwanted situation. The records are part of organization wealth and also the organization has to make that all these records are safe.