What Must a Company Do Prior to Pricing a Product

question 33

Essay

What must a company do prior to pricing a product?

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Definitions:

Goods In Transit

Items that have been shipped by a seller but not yet received by the buyer, thus in the process of being transported.

Consignment

A business arrangement where goods are left in the possession of another party to sell, but ownership remains with the supplier until sold.

F.O.B. Destination

Seller pays or is responsible for the cost of freight to purchaser’s location or destination.

FIFO Method

First-In, First-Out method, an inventory valuation method where the first items purchased are the first ones sold, used in calculating cost of goods sold.