Pricing Sheet Definition:
Pricing Sheet :-
Pricing Sheet is an internal document prepared by the Sales Officer at the Head Office as a basis of Price Quote offered to the customer in response to an order inquiry. It is the key document that segregates the cost and profit margin included in each sales order. It thus helps to keep a check on profit margin negotiated on an order-to-order basis.
The pricing sheet is divided into four segments that provide a break up of the Price Quote offered to a customer.
Pricing Sheet
Pricing Sheet :-
Pricing Sheet is an internal document prepared by the Sales Officer at the Head Office as a basis of Price Quote offered to the customer in response to an order inquiry. It is the key document that segregates the cost and profit margin included in each sales order. It thus helps to keep a check on profit margin negotiated on an order-to-order basis.
The pricing sheet is divided into four segments that provide a break up of the Price Quote offered to a customer.
Pricing Sheet
The pricing sheet is divided into four segments that provide a break up of the Price Quote offered to a customer:
Seg. | Description | Guidelines/ Remarks |
I | Cost of Manufacturing | - The costs include direct cost of manufacturing, processing and overhead costs distributed based on ABC costing. - Price escalation terms is specified in the sheet. - The standard cost data is approved by the Costing Department and released in advance of the applicable period. |
II | Selling and Distribution Cost | - The costs may vary based on selling and distribution (delivery) terms agreed with the customer. - The standard costs is approved by the Costing Department |
III | Cost of Credit & Discounts | - Notional cost of credit period allowed is also worked (this is applicable in case of LC also). - The interest rates to be used is approved by the Costing Department. |
IV | Expected Profit Margin | - Profit margin as a percentage of cost and in absolute terms is computed. - In case the profit margin is lower than the floor limit for the sales officer dealing with the customer order, the authority approving the case. |