A firm solves a pricing problem by choosing a pricing methodology that takes into account at least one of three considerations. The company hopes that the chosen method will allow it to correctly calculate the specific price. There are several pricing methods: average costs plus profit; break-even analysis and ensuring target profit; setting target profit; setting prices based on the perceived value of the product; setting prices based on current price levels.
The simplest method of pricing is to add a certain markup to the cost of the product. In order not to go bankrupt, the enterprise must make a profit, and in this sense, setting a markup percentage is a very important strategic consideration. There are two methods for calculating markups, based on cost or selling price:
When calculating the markup percentage, most retailers base it on the selling price. In some cases, a retailer would like to be able to convert markups based on sales price to markups based on cost, and vice versa. The margins vary widely depending on the type of goods. Differences in markups reflect differences in unit costs, sales volumes, inventory turns, and the ratio between manufacturer brands and private labels. But it is not logical to use standard markups when setting prices. Any calculation method that does not take into account the specifics of current demand and competition is unlikely to achieve the optimal price. The method of calculating prices based on markups remains popular for a number of reasons. First, sellers know more about costs than about demand. By tying price to costs, the seller simplifies the pricing problem for himself. Second, if all firms in an industry use this pricing method, their prices are likely to be similar. That's why price competition is reduced to a minimum. Thirdly, many consider this technique to be fairer to both buyers and sellers. When demand is high, sellers do not profit at the expense of buyers and at the same time receive a fair rate of return on their invested capital.
Selecting a model for calculating the level of trade markup. This choice is determined by the specific target chosen to implement the pricing policy for a given group (subgroup, type) of goods:
When the pricing policy is focused on the buyer, the basic element for calculating the level of trade markup is the price level of the product acceptable for the relevant categories of buyers. In this case, the model for calculating the level of trade markup to the purchase price of goods has the form:
where: -- level of trade markup to the purchase price of goods in% (first calculation model);
The sales price level for the product is acceptable for a specific category of buyers;
When pricing policy is guided by current costs, the basic element for calculating the level of trade markup is the amount of distribution costs per unit of goods sold. In this case, the model for calculating the level of trade markup to the purchase price of goods has the form:
where is the level of trade markup to the purchase price of goods in %;
P - the estimated amount of profit per unit of goods sold;
The rate of value added tax (and other taxes paid from income trading enterprise), V %;
The level of profit to distribution costs, in% (usually set uniformly for goods with a given pricing policy);
The purchase price of a unit of goods from the supplier;
When pricing policy is guided by profit, the basic element for calculating the level of trade markup is the target level of profitability of distribution costs (determined by the ratio of the target amount of profit to the planned amount of distribution costs of the enterprise, in %). In this case, the model for calculating the level of trade markup to the purchase price of goods has the form:
where is the level of trade markup to the purchase price of goods, in%;
CP - the estimated amount of target profit per unit of goods sold;
IO - the average amount of distribution costs per unit of goods sold;
Rate of value added tax (and other taxes paid from the income of a trading enterprise), in%;
Average enterprise target level of profitability of distribution costs, in%;
The purchase price of a unit of goods from the supplier.
Send your good work in the knowledge base is simple. Use the form below
Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.
Non-state educational institution
higher professional education
"Institute of Management"
(Arkhangelsk)
Department of Accounting, Analysis and Audit
Test
Discipline: "Pricing"
Topic: "Trade markup"
Is done by a student:
Jalilova E.O.
Faculty: economics
Group: BZ2-31
Specialty: 080109
Checked by: K.L. Mikhailov
Introduction
1. Trade markup
2. Task 1
3. Task 2
4. Task 3
Conclusion
Introduction
The subject of the pricing policy of a trading enterprise is not the price of the product as a whole, but only one of its elements - the trade markup. It is this element of the price of a product that characterizes the price of trade services offered to the buyer when it is sold by a trading enterprise. And only this price element, taking into account the conditions of the consumer market, the conditions of its economic activity, the manufacturer’s price level and other factors, is formed by the trading enterprise independently. This specificity trading activities determines the features of the formation of the pricing policy of a trading enterprise. This is the relevance of the topic test work.
The subject of the control work is the trade markup, as the main element of the price of a product.
Currently, for the formation of trade markups (margins) on goods sold at free prices. Two approaches are used - cost and market.
At cost-effective approach the amount of trade markups (margins) as a percentage of turnover is determined by summing up the projected level of costs and the profitability indicator (profit as a percentage of turnover). This method of calculating trade markups (margins) is used for goods (products) sold in conditions of little competition.
IN last years The market approach to establishing trade markups (margins) is increasingly being used, the essence of which is that the price is determined by the market based on supply and demand. Knowing the market price of a product (raw material), a trading company looks for the opportunity to purchase it at the best price. low prices, in order to obtain a gross income that would be sufficient to reimburse costs and generate profit. This approach to determining the level of trade markup (margin) takes place in the context of developing competition in product markets.
When assessing the current level of trade markup, the main goal is to determine the minimum level below which it cannot be set based on the requirement for self-sufficiency in the process of selling goods.
The possible level of current costs of an enterprise associated with the sale of certain groups of goods, as well as the level of taxation of income, will represent the minimum basis on the basis of which the levels of trade markups can be formed.
The theoretical part of this work presents the concept of a trade markup, its elements and functions, the purposes of a trade markup, the process of determining a trade markup, and methods for calculating it. The test contains calculations of the trade markup using an example from the real economy.
In the practical part of the test, the solution to three problems is presented: 1) constructing supply and demand schedules, determining the equilibrium price; 2) drawing up a cost estimate for 100 pieces of a product, drawing up the structure of the free selling price; 3) calculation of the free retail price of the product.
1. Trade markup
1.1 Definition of trade markup, its elements and functions
In commercial practice, a product usually passes through several stages before it is purchased by the final buyer. To determine sales prices in a multi-tier product distribution system, trade discounts and allowances are used.
Trade markup (margin) is the amount by which the seller can increase the price of a product compared to the cost of this product for himself. Accordingly, the price is calculated based on the following formula:
P S = P P * (1 + M pp)
where Р S is the selling price of the product; Р р - purchase price of goods; Мрр - trade markup on the purchase price, fraction of a unit.
The trade markup of an enterprise consists of three main elements:
1) the amount of distribution costs associated with the sale of goods;
2) amounts tax payments included in the price of the product, i.e. paid directly from the income of a trading enterprise (these include value added tax, excise duty, customs duties and duties
3) the amount of profit and sales of goods (before taxes are deducted from it).
A reduction in the level of distribution costs (i.e., their size in the price of each product) can be achieved through an increase in the volume of sales of goods, the implementation of internal reserves for their savings and other areas of economic activity. A reduction in the amount and level of tax payments included in the price of goods can be achieved by improving the assortment policy of the enterprise, refusing to import a number of goods, implementing a more effective tax policy (more complete use of the system of tax incentives) and other measures. Reducing the level of the first two elements in the price of goods makes it possible to form a higher profit margin (profitability level) within the range of the trade markup, i.e. implement a more effective pricing policy.
Trade markup (margin) is the price of services of trade enterprises and Catering to bring the product to the consumer and its sale. Its main goals are to reimburse the current costs of material, labor and financial resources aimed at promoting goods from the manufacturer to the consumer and ensuring the profitability of the goods sold. Achieving the set goals depends on the size of the trade markup (margin), determined by both the external and internal boundaries of its formation.
The external boundaries of the formation of a trade markup (margin) are determined by the emerging situation in the consumer market. The lower limit for the formation of a trade markup depends on the wholesale supply price of manufacturers and wholesale intermediaries. These prices are flexible to a certain extent, as they change during commercial transactions. The upper limit for the formation of a trade markup (margin) is the demand prices of buyers of goods (products), which vary to the same extent depending on the level of trade services, payment terms and other factors.
Being an integral element of the price of a product, trade markups (margins) perform a number of economic functions, closely related to each other:
1) measuring, thanks to which it is possible to establish the share of enterprises in the price of the goods (products) sold;
2) the planning and accounting function is connected with the measuring function. By determining the share in the price of a product (product), trade markups (markups) become a tool for accounting for gross income received from sales. Along with accounting, trade markups (margins) are used in the analysis and planning of gross income;
3) the stimulating function is manifested in increasing the interest of trade and public catering enterprises in making a profit, ensuring their stable position in the market, expanding the volume of activity and development social sphere. This ensures the solution of the problems of self-sufficiency and self-financing;
4) the regulatory function is expressed in the fact that trade markups (margins) are a mechanism for balancing the supply and demand of goods on the market. Their increase or decrease causes a buyer response, characterized by a change in demand. The regulatory function also manifests itself when the state influences the formation of wholesale and retail prices with the help of the upper limit of trade markups (margins) established by it.
1.2 Trade markup as a source of gross income
The trade markup is the main source of gross income. Being a trade price, premiums are formed in accordance with the general pricing mechanism. Their value is influenced by the nature of the services, the specifics of the activity, the pricing policy of the enterprise (firm), government policy pursued in the field of exchange, supply and demand for trade services, the level of distribution costs, strategic target criteria adopted by the enterprise for a given period of operation.
Gross income from sales is created through trade markups in wholesale and retail trade and markups on products of own production in public catering, which are special structural element prices of goods (products) and reflecting the share of enterprises in its formation. The richer the society, the higher the requirements for the quality of trade services, and, accordingly, the higher the share of trade markups (markups) in the price of goods.
One of external factors competition influences the formation of the level of trade markup (margin). Depending on the chosen competitive strategy, the company either seeks to secure leadership in prices or focuses on the average price level of competitors. The last strategy is the predominant one. In an effort to keep prices lower. Compared to their competitors, trade and catering enterprises set an appropriate level of trade markups (margins), implementing a cost-saving regime in order to recover costs and be able to make a profit.
The basis for the formation of the level of trade markup (margin) is the level of prices for purchasing goods. Despite the deep relationship, the level of trade markup (margin) is not always determined by the price level of the product. So. At a low manufacturer price level, a high level trade markup (markup), and vice versa - at a high level of manufacturer prices, trade and public catering enterprises are limited to a low level of trade markup (markup). In more advantageous position There are enterprises that implement a saving regime and, as a result, receive a significant amount of profit.
The relationship between supply and demand that is emerging in the market provides an opportunity for a differentiated approach to determining the level of trade markup (margin). An increase in demand for a product (product) with a limited supply makes it possible to establish a higher level of trade markup (margin) and generate a significant amount of gross income. When supply exceeds demand, trade and public catering enterprises have to reduce the level of trade markup (margin), sometimes bringing it to the lower limit. The greater the difference between the volume of supply and demand, the less opportunities there are for generating the required amount of gross income.
When determining the level of trade markup (margin), it is advisable to take into account the stage of the product (product) life cycle. At the stage of introducing a new product (product) to the market, the level of trade markup (margin) is set to a minimum. And the sale is often unprofitable. During the recovery stage, the level of trade markup (margin) increases, and the volume of gross income increases accordingly. The highest trade markup is formed at the maturity stage, when the sales volume is maximum. The stage of withdrawal of a product (product) from the market is accompanied by a drop in the level of trade markup and a significant decrease in gross income.
A factor that reduces the level of trade markup (margin) is the increase in the level of product distribution. An increase in the number of intermediaries in the promotion of goods (products) in the sphere of circulation leads to a significant increase in its price, since each of them adds its own level of trade markup to the purchase price. The higher this price, the lower the level of trade markup is set by the next link in the distribution network. Based on price. Which the consumer can pay.
The level of trade markups (margins) is differentiated depending on the type of trade and public catering enterprises. Their differences in retail and wholesale trade are explained by the timing of the sale of goods, turnover, the need to provide additional services during sales and after-sales service. Limited sales time (especially for perishable goods), fast turnover food products influence the formation of a lower level of trade markup. Since they reduce the amount of costs required to bring them to the buyer. The slow turnover of non-food products (especially complex assortments) and the additional costs of their sale are the determining factors for establishing a higher level of trade markup.
The level of trade markups (margins) depends on the method used to organize sales. Thus, the introduction of self-service, trading according to samples, through vending machines helps to establish a lower level of costs by saving money on paying for human labor. Reducing these costs provides the opportunity to reduce the price of goods (products), while simultaneously stimulating an increase in sales volume and gross income.
The level of trade markups (margins) depends on the strategic goal chosen by the enterprise. If the goal is to expand the sphere of influence in the market, then the level of the trade markup (margin) is set based on the market prices for the purchase and sale of goods. When enterprises are focused on making a profit, the level of trade markup (margin) is formed in such a way as to reimburse costs and develop the production and social spheres.
All of the above factors are interconnected, acting simultaneously and often in different directions, increasing or decreasing the gross income of trade and public catering enterprises.
1.3 Methods for calculating trade markup
A firm solves a pricing problem by choosing a pricing methodology that takes into account at least one of three considerations. The company hopes that the chosen method will allow it to correctly calculate the specific price. There are several pricing methods: average costs plus profit; break-even analysis and ensuring target profit; setting target profit; setting prices based on the perceived value of the product; setting prices based on current price levels.
The margins vary widely depending on the type of goods. Differences in markups reflect differences in unit costs, sales volumes, inventory turns, and the ratio between manufacturer brands and private labels. But it is not logical to use standard markups when setting prices. Any calculation method that does not take into account the specifics of current demand and competition is unlikely to achieve the optimal price. The method of calculating prices based on markups remains popular for a number of reasons. First, sellers know more about costs than about demand. By tying price to costs, the seller simplifies the pricing problem for himself. Second, if all firms in an industry use this pricing method, their prices are likely to be similar. Therefore, price competition is reduced to a minimum. Thirdly, many consider this technique to be fairer to both buyers and sellers. When demand is high, sellers do not profit at the expense of buyers and at the same time receive a fair rate of return on their invested capital.
The choice of model for calculating the level of trade markup is determined by the specific target selected for the implementation of pricing policy for a given group (subgroup, type) of goods:
a) when the pricing policy is focused on the buyer, the basic element for calculating the level of trade markup is the price level of the product acceptable for the relevant categories of buyers. In this case, the model for calculating the level of trade markup to the purchase price of goods has the form:
where Utn1 is the level of trade markup to the purchase price of goods in% (first calculation model);
CR - the level of selling price of a product acceptable for a specific category of buyers;
b) when pricing policy is guided by current costs, the basic element for calculating the level of trade markup is the amount of distribution costs per unit of goods sold. In this case, the model for calculating the level of trade markup to the purchase price of goods has the form:
where Utn2 is the level of trade markup to the purchase price of goods in% (second calculation model)
P - the estimated amount of profit per unit of goods sold (it is calculated using the formula given separately);
SND - rate of value added tax (and other taxes paid from the income of a trading enterprise), in%;
UP - the level of profit to distribution costs, in% (usually set uniformly for goods with a given pricing policy);
Ts is the purchase price of a unit of goods from the supplier;
c) when the pricing policy is guided by profit, the basic element for calculating the level of the premium is the target level of profitability of distribution costs (determined by the ratio of the target amount of profit to the planned amount of distribution costs of the enterprise, in %). In this case, the model for calculating the level of trade markup to the purchase price of goods has the form:
where UtnZ is the level of trade markup to the purchase price of goods, in% (third calculation model);
CP - the estimated amount of target profit per unit of goods sold (it is calculated using a separate formula);
IO - the average amount of distribution costs per unit of goods sold;
SND - rate of value added tax (and other taxes paid from the income of a trading enterprise), in%;
URts - the average enterprise target level of profitability of distribution costs, in%;
Ts is the purchase price of a unit of goods from the supplier.
1.4 Example of calculating trade markup from the real economy
Let us give an example of calculating a trade markup from the real economy. Let's calculate the trade markup using the example of Techno Service LLC.
The organization Techno Service LLC carries out several types of activities. Among them: provision of funeral services; trade in ritual supplies; production of coffins, monuments, wreaths for ritual purposes. Techno Service LLC sets different levels of premium for different types goods. The trade markup ranges from 30% to 100%, depending on the product group. The smallest trade markup (30%) is set for more expensive goods (coffins, monuments, fences, etc.). The highest trade markup (50%, 70%, 100%) is set for purchased goods (shrouds, candles, textiles, icons, etc.) Let us calculate the trade markup per unit of purchased goods using various methods. Let's take a wreath for example.
Method 1 (customer-oriented).
Utn1=((Tsr-Tsz)*100)/Tsz
The sales price level for goods acceptable for a specific category of buyers (TsR) is 400.00 rubles.
The purchase price of goods from the supplier (TS) is 250.00 rubles.
Utn1=((400.00-250.00)*100)/250.00, Utn1=60%.
Method 2 (cost-oriented).
Let us determine the estimated amount of profit per unit of goods sold (P):
P=(IO*Up)/100
The level of profit to distribution costs (CP) is 60%.
P=(52.00*60)/100, P=31.20 rub.
Utn2=((IO+P)*10000)/(Tsz*(100-Snd))
The average cost (AI) is 52.00 rubles;
The profit per unit of goods sold (P) is equal to 31.20 rubles;
The VAT rate (SND) is 18%.
Utn2=((52.00+31.20)*10000)/250.00*(100-18), Utn2=40.6%
Method 3 (profit oriented).
Let's determine the estimated amount of target profit (TP)
CPU=(IO*URts)/100
The average cost (AI) is 52.00 rubles;
The average target level of cost profitability (ROC) is 100%.
CPU=(52.00*100)/100, CPU=52.00 rub.
Utn3=((CP+IO)*10000)/(Tsz*(100-Snd))
The estimated amount of target profit (TP) is RUB 52.00;
The average cost (AI) is 52.00 rubles;
The price for purchasing goods from the supplier (TS) is 250.00 rubles;
The VAT rate (SND) is 18%.
Utn3=((52.00+52.00)*10000)/(250.00*(100-18)), Utn3=50.7%
Based on the calculations, it is clear that it is beneficial for the Techno Service LLC enterprise to use the first method of calculating trade markups, that is, consumer-oriented. IN in this example The specific purpose of the group of goods sold also affects it. When choosing the first method of calculating the trade margin, the final price of one wreath will be 400.00 rubles, which is most beneficial for the seller and acceptable for the buyer.
2. Task 1
|
Price per unit of product A, rub. |
Demand for product A, pcs. |
Supply of product A, pcs. |
||||||||
1. Using the data given in the table, construct supply and demand graphs.
2. Determine the equilibrium price of product A.
3. Determine the change in the equilibrium price when the income of buyers increases by 10% (other things being equal).
Option 1.
1. The demand schedule for product A is shown in Fig. 1.
The demand curve shows that when the price increases, the effective need of people decreases and vice versa, when the price decreases, the demand for good A increases. In this example, demand is considered elastic, meaning the quantity demanded changes by a larger percentage than the price.
The supply schedule for product A is shown in Fig. 2.
The supply curve shows how producers increase sales as prices rise, and vice versa, their supply decreases as prices fall. IN in this case the supply of product A is considered inelastic, because its value changes by a smaller percentage than the price of product A.
2. The equilibrium price is a price indicating that the seller’s price (at which it is profitable for him to trade) coincides with the buyer’s price (which suits the latter). The determination of the equilibrium price is presented in Fig. 3.
Point P on the chart is the equilibrium price. If we project the equilibrium point P onto the ordinate axis, we find the equilibrium price of product A. In this example, the equilibrium price of product A is 26 rubles.
3. As the income of buyers increases, the demand for product A increases. In this case, the demand for product A increases by 10%. The change in the equilibrium price when the demand for product A changes is shown in Fig. 4.
The equilibrium price with an increase in buyer income is indicated on the graph by point P1. The figure shows that as buyer income increases, the equilibrium price increases. With an increase in demand for product A, the equilibrium price is 27 rubles.
Option 2.
1. The demand schedule for product A is shown in Fig. 5.
The supply schedule for product A is shown in Fig. 6.
2. The determination of the equilibrium price is presented in Fig. 7.
Point P on the chart is the equilibrium price. The equilibrium price of good A is 30 rubles.
3. The change in the equilibrium price with an increase in buyer income by 10 percent is shown in Fig. 8.
The equilibrium price with an increase in buyer income is indicated on the graph by point P1. The figure shows that as buyer income increases, the equilibrium price increases. With an increase in demand for product A, the equilibrium price is 32 rubles.
Option 3.
1. The demand schedule for product A is shown in Fig. 9.
Demand for good A is elastic. The quantity demanded changes by a greater percentage than the price.
The supply schedule for product A is shown in Fig. 10.
The supply of good A is elastic. The quantity supplied of good A changes by a greater percentage than the price of good A.
2. The determination of the equilibrium price is presented in Fig. 11.
Point P on the chart is the equilibrium price. The equilibrium price of good A is 37 rubles.
3. The change in the equilibrium price with an increase in buyer income by 10 percent is shown in Fig. 12.
The equilibrium price with an increase in buyer income is indicated on the graph by point P1. The figure shows that as buyer income increases, the equilibrium price increases. With an increase in demand for product A, the equilibrium price is 38 rubles.
3. Task 2
|
Index |
||
|
1. Costs for 100 pieces of product A |
||
|
· raw materials and materials, rub. |
||
|
· fuel and energy for technological needs, rub. |
||
|
· basic salary of production workers, rub. |
||
|
· additional wages for production workers (as a percentage of the base salary) |
||
|
· contributions for social needs, % |
||
|
· expenses for maintenance and operation of equipment (in % of wages production workers) |
||
|
· shop expenses (as a % of wages of production workers) |
||
|
general production expenses (as a percentage of production workers’ wages) |
||
|
· non-production expenses (as a percentage of production costs) |
||
|
2. Free selling price of one product A (including VAT), rub. |
1. Calculate the cost of 100 pieces of product A. Determine the workshop cost, production cost, and total cost.
2. Determine the profit from the sale of one product A.
3. Draw up the structure of the free selling price of product A.
1. Calculation of the cost of 100 pieces of product A.
|
Costing items |
Amount in rubles, kopecks |
|
|
1. Raw materials and materials |
||
|
2. Fuel and energy for technological needs |
||
|
3. Basic wages for production workers |
||
|
4. Additional wages for production workers |
250,00*20%=50,00 |
|
|
5. Contributions for social needs |
300,00*38,5%=115,50 |
|
|
6. Expenses for maintenance and operation of equipment |
300,00*42%=126,00 |
|
|
7. Shop expenses |
300,00*20%=60,00 |
|
|
8. Total: Shop cost |
(1)+(2)+(3)+(4)+(5)+(6)+(7) =1001,50 |
|
|
9. General production expenses |
300,00*80%=240,00 |
|
|
10. Total: Production cost |
||
|
11. Non-production expenses |
1241,50*1%=12,42 |
|
|
12. Total: Full cost |
(10)+(11)=1253,92 |
The workshop cost of 100 pieces of product A is 1001.50 rubles, the production cost is 1241.50 rubles, and the total cost is 1253.92 rubles.
2. The total cost of one product A is 12.54 rubles (1253.92:100).
The free selling price of one product A (including VAT) is 20.56 rubles. Let's determine the free selling price without VAT: 20.56*100.00:118.00=17.42.
The profit from the sale of one product A is 4.88 rubles or 38.9% (4.88:12.54*100).
3. Structure of the free selling price A.
4. Task 3
Given: The company sells excisable products. Cost - 10 rubles. ten units of products, profitability to cost is assumed to be 50%. The excise tax rate on the type of goods produced is 85%. VAT rate is 20%. Supply and sales allowance 50%. Trade markup 25%.
1. The cost of ten units of a product is 10 rubles. The cost of one unit of product is 1 rub. (10:10).
2. Let's calculate the free selling price of one product.
|
Price elements |
Amount in rubles, kopecks |
|
|
1. Cost |
||
|
2. Profit |
||
|
(1)+(2)+(3)=2,78 |
||
|
6. Free selling price including VAT |
3. Let's calculate the free retail price of one product.
|
Price elements |
Amount in rubles, kopecks |
|
|
1. Cost |
||
|
2. Profit |
||
|
4. Free selling price without VAT |
||
|
5. Supply and sales allowance |
||
|
6. Trade markup |
||
|
7. Free retail price excluding VAT |
(4)+(5)+(6)=4,87 |
|
|
9. Free retail price including VAT |
The free retail price of one product is 5.84 rubles.
Conclusion
A trade premium is the amount of money by which a seller increases the selling price compared to the purchase price for himself. Trade markups are determined by the seller independently, based on market conditions. The trade markup includes the seller's costs, including transportation costs for delivering goods from the supplier. Other expenses for the purchase and sale of goods, as well as profit and value added tax are included.
With the orientation of the economy towards market relations and the transition to free pricing, enterprises began to determine the size of the trade markup themselves. At first its size was limited and different periods since 1991 it has varied for various goods and product groups from 15 to 38%. Gradually, corresponding changes occurred in the mechanism for forming the trade markup. Since the end of 1994, restrictions on the size of trade and wholesale sales mark-ups have been lifted. At the same time, for executive bodies The authorities have the right, if necessary, to regulate by their decision the size of the trade markup on socially important goods.
The executive authorities of the constituent entities of the Russian Federation establish and regulate the size of trade markups on prices for food products (including food concentrates), medicines and medical products; markups on products sold at public catering establishments at educational schools, vocational schools, secondary specialized and higher educational institutions, as well as on products and goods sold in the Far North and equivalent areas with limited delivery times for goods.
The possibility of self-regulation of prices and trade markups depends on a decrease in the level of inflation and an increase in the economy as a whole. In current business conditions, the level of trade markup should be determined taking into account market conditions, the relationship between supply and demand for a specific product, the size of the selling price, distribution costs, profits, and indirect tax rates.
The main requirements for the validity of trade markups are as follows:
They must create conditions for the profitable operation of a trading enterprise;
Reflect the specifics of the sale of individual goods;
Stimulate efficient use available resources;
Take into account the territorial location of production (suppliers) and the ways of promoting individual goods to the consumer, help reduce the transportation of products from the place of production to consumption;
To promote simplification of settlement practices and improvement of relations between trading enterprises among themselves, with enterprises in other sectors of activity, with banks, financial and tax authorities.
Bibliography
1. Enterprise Economics / Ed. acad. V.M. Semenova - St. Petersburg: Peter, 2005.
2. Prices and pricing / A.A. Oganesyan - M., 2001.
3. Pricing policy of the enterprise / V.M. Tarasevich - St. Petersburg: Peter, 2001.
4. Economics of trade and public catering enterprises: Textbook. allowance / Hand. Auto. Col. T.I. Nikolaev; Scientific Ed. N.R. Egorova - Ekaterinburg: Ural Publishing House. State econ. Univ., 2001.
5. Economics and organization of activities of a trading enterprise: Tutorial/ Under general Ed. A.N. Solomatina - M.: INFRA-M, 2001.
6. Detailed accounting and prices / I.P. Ulyanov - M., 1998.
7. Analysis of the economic activity of the enterprise / G.V. Savitskaya - M.: INFRA-M, 2002.
Similar documents
The essence and concept of gross income, its meaning, composition, sources, methods of measurement and forecasting. The essence of the trade markup (margin), its formation and functions. Methodology and sequence of analysis of gross income by total volume.
course work, added 09.20.2009
Income from trading activities. Economic justification for the size of the trade markup. The economic essence of profit from sales. Tasks, methods for calculating gross income. Financial justification for the profit plan. Calculation of gross income and profit at the enterprise.
course work, added 03/24/2012
Types and causes of monopolies. Determining the volume of supply and demand; equilibrium price and gross income; profit and break-even point of production. Selecting the most profitable project for investment based on discounted cost.
test, added 02/22/2015
Provisions of the theory of pure (perfect) competition. The mechanism of market functioning, interaction between buyer and seller. Determining the equilibrium price and equilibrium quantity using the supply and demand function. Calculation of manufacturer's profit.
test, added 03/24/2015
Determination of the essence and rules of formation of the equilibrium price. Study of the state of demand, with an increase or decrease in supply. Features of capital and analysis of supply and demand factors in the market. Distinctive features of the discounting procedure.
test, added 10/26/2010
Calculation of costs for materials, semi-finished products and components. Drawing up a cost estimate and determining its price. Determining the economic effect of introducing a product. Network diagram development technical training production.
course work, added 03/31/2009
Market equilibrium of supply and demand. Stability and instability of market equilibrium. Comparison of the Walras and Marshall approaches to the analysis of establishing equilibrium price and supply. The phenomenon of an inverse relationship between the price of demand and its volume.
abstract, added 01/09/2015
Supply and demand in markets as the most important category of microeconomic analysis. The law of demand, factors of its change. Price elasticity of demand. Factors of change in supply, its elasticity. Establishment of equilibrium price according to Walras and Marshall.
course work, added 02/25/2010
Features of calculating the required amount of equipment for the production of a given product. Determination of the number of workers and site staff, analysis of methods for calculating the wage fund. Drawing up cost estimates and determining the cost and price of the product.
course work, added 02/26/2010
Concept, composition, sources of income for an enterprise in modern conditions. Trade markup as a source of gross income. Assessment of the dynamics of the total amount, level and structure of income of Marco Polo LLC. Reserves for enterprise income growth.
A trade markup (margin) is the price of services provided by trading enterprises in bringing goods to consumers and selling them. Its main goals are to reimburse the current costs of material, labor and financial resources aimed at promoting goods from the manufacturer to the consumer and ensuring the profitability of the goods sold. Achieving the set goals depends on the size of the trade markup (margin), determined by both the external and internal boundaries of its formation.
The external boundaries of the formation of a trade markup (margin) are determined by the emerging situation in the consumer market. The lower limit for the formation of a trade markup depends on the wholesale supply price of manufacturers and wholesale intermediaries. These prices are flexible to a certain extent, as they change during commercial transactions. The upper limit for the formation of a trade markup (margin) is the demand prices of buyers of goods (products), which vary to the same extent depending on the level of trade service, payment terms and other factors.
The internal boundaries of the formation of the possible range of the trade markup (margin) are determined by its structure, characterized by two main elements.
The ratio of these elements in the price of the product may vary. Thus, a reduction in costs can be achieved by increasing the volume of sales of goods (products) and finding savings reserves.
As an integral element of the price of a product, trade markups (margins) perform a number of economic functions that are closely related to each other:
measuring, thanks to which it is possible to establish the share of enterprises in the price of the goods (products) sold;
The planning and accounting function is connected with the measuring function. By determining the share in the price of a product (product), trade markups (margins) become a tool for accounting for gross income received from sales. Along with accounting, trade markups (margins) are used in the analysis and planning of gross income;
the stimulating function is manifested in increasing the interest of trade and public catering enterprises in making a profit, ensuring their stable position in the market, expanding the volume of activity and developing the social sphere. This ensures the solution of the problems of self-sufficiency and self-financing;
the regulatory function is expressed in the fact that trade markups (margins) are a mechanism for balancing the supply and demand of goods on the market. Their increase or decrease causes a buyer response, characterized by a change in demand. The regulatory function also manifests itself when the state influences the formation of wholesale and retail prices with the help of the upper limit of trade markups (margins) established by it.
The volume of gross income received as a result of the sale of goods and products. It is the main source of profitable operation of trade and public catering enterprises, a condition for their stable position in the market. The desire to increase gross income necessitates the study of factors. Its determinants, in order to create a mechanism for managing gross income. These factors are very diverse.
In the process of managing gross income - when analyzing them, searching for growth reserves and planning - all factors are usually divided into two main groups:
depending on the activities of trading enterprises (internal factors);
independent of the activities of trading enterprises (external factors).
The system of external factors includes:
state policy in the field of regulation of trade markups (margins), customs duties, bank interest rates for using loans, rental rates, various tariffs;
degree of competition in the consumer goods market;
the level of wholesale (purchase) prices for goods (raw materials) of manufacturing enterprises;
solvency of the population;
supply and demand relationship; life cycle goods;
territorial location, etc.
The amount of gross income depends on the state policy regarding the regulation of trade markups (margins). By determining the upper limit of trade markups (margins) on socially significant goods, the state. On the one hand, it protects the interests of the consumer, preventing the formation of high incomes from trade and public catering, and on the other hand, it creates the interest of trade and public catering enterprises in reducing costs and generating profits. Foreign economic activity states in the field of trade manifests itself through the use of measures to regulate the level of customs duties. Its growth increases not only the cost of purchased imported goods (raw materials), but also the price of their sale, forming a larger volume of gross income for trade and public catering enterprises.
The system of internal factors includes: the volume of trade turnover, its structure, composition, level of product distribution, typification of trade and public catering enterprises, quality of goods and level of trade services, target strategy.
An indirect impact on the amount of gross income is exerted by changes in tax payment rates that are part of costs. These include: contributions to social insurance, to the employment fund, Pension Fund, for health insurance, the tax base of which is the payroll fund. Since it makes up a significant share of costs, the size of these payments is significant. A change in their rates is reflected not only in the level of costs, but also in the formation of the corresponding level of trade markups. And that means on the amount of gross income.
Similarly, the amount of gross income is affected by changes in bank interest rates, rental rates, and various tariffs paid to trade and public catering enterprises for services provided externally. Their growth is immediately followed by an increase in the level of trade markups (margins).
One of the external factors influencing the formation of the level of trade markup (margin) is competition. Depending on the chosen competitive strategy, the company either seeks to secure leadership in prices or focuses on the average price level of competitors. The last strategy is the predominant one. In an effort to keep prices lower. Compared to their competitors, trade and public catering enterprises set an appropriate level of trade markups (margins), implementing a cost-saving regime in order to recover costs and be able to make a profit.
The basis for the formation of the level of trade markup (margin) is the level of prices for purchasing goods. Despite the deep relationship, the level of trade markup (margin) is not always determined by the price level of the product. So. At a low level of manufacturer prices, a high level of trade markup (margin) can be formed, and vice versa - at a high level of manufacturer prices, trade and public catering enterprises are limited to a low level of trade markup (markup). Enterprises that implement a saving regime and, as a result, receive a significant amount of profit, are in a more advantageous position.
The effective demand of the population for consumer goods has a significant impact on the size of gross income. The higher its volume, the more high-quality and expensive goods the population will purchase, the higher the income from trade and public catering will be from the sale of goods and products of their own production.
The relationship between supply and demand that is emerging in the market provides an opportunity for a differentiated approach to determining the level of trade markup (margin). An increase in demand for a product (product) with a limited supply makes it possible to establish a higher level of trade markup (margin) and generate a significant amount of gross income. When supply exceeds demand, trade and public catering enterprises have to reduce the level of trade markup (margin), sometimes bringing it to the lower limit. The greater the difference between the volume of supply and demand, the less opportunities there are for generating the required amount of gross income.
Tatiana AMITOVA
Every day, trade organizations carry out many business transactions related to the circulation of goods. The seller's income is the markup on the goods sold. For a trading organization to be profitable, the markup must cover all costs associated with the sale of goods. In other words, a markup is the added value to the purchase price of a product. Due to the markup, trading organizations cover selling costs, make a profit and pay indirect taxes (VAT, excise taxes, sales tax, etc.). The procedure for creating a markup Organizations are given the right to set retail prices for goods themselves. At the same time, they can use the Methodological recommendations for the formation and application of free prices and tariffs for products, goods and services, approved by letter of the Ministry of Economy of the Russian Federation dated December 6, 1995 No. SI-484/7-982 (hereinafter referred to as the recommendations). This document states that the markup is determined in accordance with market conditions, quality and consumer properties of the goods. It must cover distribution costs, tax amounts, and also include the organization’s income. The distribution costs of a trade organization include transportation costs, labor costs and contributions for social needs (UST,
- insurance premiums
- from accidents at work and occupational diseases), rental costs, depreciation charges, advertising costs and others.
- Current legislation does not limit the maximum markup for most types of goods. Organizations determine the size of the markup independently. The state regulates prices, in particular, for the following goods:
- baby food products;
- medicines;
listed in Article 9 of the Accounting Law. The amount of the trade margin is reflected in accounting as the debit of account 41 “Goods” and the credit of account 42 “Trade margin”. Example 1
Salut LLC purchased 20 vacuum cleaners for sale in its store with a total cost of 96,000 rubles. (including VAT RUB 16,000).
The trade margin on the goods was set at 40% and amounted to 32,000 rubles. ((96,000 rubles – 16,000 rubles) x 40%). The selling price of the goods was 112,000 rubles. (96,000 – 16,000 + 32,000). The retail price of one vacuum cleaner is set at 5,600 rubles. (RUB 112,000: 20 pcs.). Salut LLC filled out a register of retail prices compiled in free form: | Name of product | Quantity | Supplier price (excluding VAT), rub. | Trade margin Selling price | (gr. 4 + gr. 6) Retail price of a product unit, rub. |
||
(gr. 7: gr. 3) | 112 000 | ||||||
The purchase of vacuum cleaners for resale is reflected in the accounting records with the following entries: Debit 41 Credit 60– 80,000 rub. (96,000 – 16,000) – vacuum cleaners were received from the supplier; Debit 19 Credit 60– 16,000 rub. – VAT is reflected on the vacuum cleaners received; Debit 60 Credit 51– 96,000 rub. – paid for the vacuum cleaners received; Debit 68 subaccount “VAT calculations” Credit 19– 16,000 rub. – accepted for deduction of VAT on vacuum cleaners received and paid for; Debit 41 Credit 42– 32,000 rub. – trade markup has been added to vacuum cleaners. – end of example – Write-off of markup when selling goods The accrued trade margin must be written off after the goods are sold. The total amount of markup on goods sold is determined at the end of the month. It is calculated based on the average markup on all goods. The procedure for such calculation is given in Methodical recommendations on accounting and registration of operations for the receipt, storage and release of goods in trade organizations (approved by letter of Roskomtorg dated July 10, 1996 No. 1-794/32-5). In accordance with this document, the average percentage of trade margin is calculated using the formula: P= (TNn + TNp – TNv): (B + OT)x 100%, Where P– average percentage of trade margin; TNN– trade margin on the balance of goods at the beginning of the month (credit balance on account 42 “Trade margin” at the beginning of the month); TNp– trade margin on goods received during the month (turnover on the credit of account 42 “Trade margin” for the month); TNv– trade margin on goods disposed of during the month, for example, returned to suppliers (turnover in the debit of account 42 “Trade margin” for the month); IN– revenue from sales of goods sold; FROM– balance of goods at the end of the month (balance on account 41 “Goods” at the end of the month). Based on the average percentage obtained, the amount of realized trade margin is determined:TNr= B Where Based on the average percentage obtained, the amount of realized trade margin is determined: x P: 100%, – realized trade margin. In accounting, the calculated amount of the margin is reversed in correspondence with account 90 “Sales” subaccount “Cost of sales”: Debit 90-2 Credit 42
– the realized trade margin is reversed. Let’s look at an example of the procedure for writing off the realized trade margin. Example 2
- Ritm LLC, which records goods at sales prices, has the following balances on its accounting accounts at the beginning of the month:
- on the debit of account 41 “Goods” - 452,000 rubles;
During the reporting month, Ritm LLC sold goods in the amount of 1,411,200 rubles. (including VAT - 224,000 rubles, sales tax - 67,200 rubles).
The amount of distribution costs related to goods sold amounted to RUB 85,000.
The balance of goods at the end of the month is 345,800 rubles. (452,000 + 1,305,000 – 1,411,200). The average percentage of realized trade margin is 33.64% ((186,000 rub. + 405,000 rub.) : (1,411,200 rub. + 345,800 rub.) x 100 %).
The amount of realized trade margin will be: RUB 474,728. (RUB 1,411,200 x 33.64%). The company reflects the sale of goods in its accounting records with the following entries:
Debit 50 Credit 90-1
– 1,411,200 rub. – revenue received from the sale of goods;
– realized trade margin. In accounting, the calculated amount of the margin is reversed in correspondence with account 90 “Sales” subaccount “Cost of sales”:
Debit 90-2 Credit 41
– 1,411,200 rub. – the sales value of goods is written off;
– 474,728 rub. – the realized trade margin was reversed;
Debit 90-5 Credit 68 subaccount “Sales tax calculations”
– 67,200 rub. – sales tax has been charged and must be paid to the budget;
Debit 90-3 Credit 68 subaccount “VAT calculations”– 224,000 rub. ((1,411,200 – 67,200) x 20: 120) – VAT is charged and payable to the budget; Debit 90-2 Credit 44– 85,000 rub. – distribution costs are written off; Debit 90-9 Credit 99– 98,528 rub. (1,411,200 – 1,411,200 + 474,728 – 67,200 – 224,000 – 85,000) – the financial result from the sale of goods is determined. – end of example –Reduction of trade margins In some cases, the seller may reduce prices for goods, that is, reduce the trade margin. This happens, for example, when goods are on sale or marked down. According to the recommendations, the reduction in trade margins should also be reflected in the register of retail prices. When the markup amount decreases Special attention has the right to verify the correctness of their application.
That is, tax authorities can recalculate the amount of revenue based on market prices and charge additional taxes. Therefore, when selling goods, a trading organization will have to charge taxes based on market prices. Let us note once again that the market price of goods should be determined in accordance with the requirements of Article 40 of the Tax Code of the Russian Federation.
Debit 41 Credit 42
A decrease in trade margins in accounting is reflected by the following entry:
– the amount of the trade margin has been reversed.
Quite often when there are sales, two items are sold for the price of one. That is, their price is halved. In practice, more significant price reductions are possible. In this case, the amount by which the goods are discounted will most likely exceed the previously accrued trade margin. Therefore, in addition to reversing the markup, the accountant must write off part of the price of the goods, reflecting in the accounting record:
Debit 91-2 Credit 41
– the excess of the markdown amount over the trade margin is written off.
Please note that the amount in excess of the markdown over the trade margin does not reduce taxable profit.
Let's look at the example of reducing trade margins. Example 3V
A household appliance store is having a sale on electric irons with a 40% discount. The purchase price of one iron excluding VAT is 1,800 rubles. The balance of goods at the end of the month is 345,800 rubles. (452,000 + 1,305,000 – 1,411,200). The average percentage of realized trade margin is 33.64% ((186,000 rub. + 405,000 rub.) : (1,411,200 rub. + 345,800 rub.) x 100 %). There was a 45% markup on the product. The amount of the markup was 810 rubles. Debit 41 Credit 42 The initial retail price of one iron is 2,610 rubles. (1800 rub. + 810 rub.). Quite often when there are sales, two items are sold for the price of one. That is, their price is halved. In practice, more significant price reductions are possible. In this case, the amount by which the goods are discounted will most likely exceed the previously accrued trade margin. Therefore, in addition to reversing the markup, the accountant must write off part of the price of the goods, reflecting in the accounting record: During the sale, the discount amount for one iron was 1044 rubles. (RUB 2,610 x 40%). The retail price, taking into account the discount, is 1,566 rubles. (2610 rubles – 1044 rubles). At the same time, the market price level for a similar product is 2000 rubles. The cost of an iron with a discount is more than 20% less than this level: 78.3% (1566 rubles: 2000 rubles x 100%). Debit 50 Credit 90-1– 23,490 rub. – the cost of goods sold is written off taking into account the discount; – 1429 rubles. (30,000 rubles: 105% x 5%) – sales tax is calculated based on the level of market prices; – 4762 rubles. ((30,000 rubles – 1429 rubles) x 20: 120) – VAT is calculated based on the level of market prices; Debit 99 Credit 90-9– 6191 rub. (23,490 – 23,490 – 1429 – 4762) – reflects the loss from the sale of goods. Debit 99 Credit 91-2– 3510 rub. – a loss is reflected from writing off the excess of the discount amount over the trade margin. This amount of loss does not reduce the total taxable profit for the reporting period. –end of example–Accounting for trade margins when returning goods In accordance with Articles 495 and 503 of the Civil Code of the Russian Federation, the buyer has the right to return the goods to the seller. This applies to low-quality goods, as well as goods about which the seller did not provide all the necessary information. When returning the goods, the seller must return the money paid for it to the buyer. This is done based on the buyer's application. If the product is under warranty service, the following documents must be attached to the application:
- workshop certificate warranty repair;
- warranty card for the product.
Note that according to Article 18 of the Law of the Russian Federation dated 02/07/92 No. 2300-1 “On the Protection of Consumer Rights” (as amended on 12/30/01), the buyer is not required to present cash receipt for the returned goods. This article states that the absence of a receipt is not grounds for refusing a refund for an item. However, in this case, the buyer must prove the fact of purchasing the goods in this store. For example, present sales receipt, warranty card, etc. If the buyer does not have any documents, then he still has the right to refer to the testimony of witnesses.
This is indicated in the letter of the Department of Tax Administration for Moscow dated 06/05/02 No. 29-12/25658.
When paying money to the buyer, the seller faces the following situation. He has already sold the goods, i.e., he realized the trade margin and received income. With the return of this product, the reverse operation occurs and the amount of income received must be reduced. That is, he must restore the realized trade margin. In accounting, an entry is made for the amount of the restored margin in the debit of account 90-2 and the credit of account 42 “Trade margin”.
The accountant recorded the sale of the refrigerator with the following entries: The balance of goods at the end of the month is 345,800 rubles. (452,000 + 1,305,000 – 1,411,200). The average percentage of realized trade margin is 33.64% ((186,000 rub. + 405,000 rub.) : (1,411,200 rub. + 345,800 rub.) x 100 %).– 15,750 rub. – revenue received from the sale of the refrigerator; Debit 50 Credit 90-1– 15,750 rub. – the selling price of the refrigerator has been written off; – realized trade margin. In accounting, the calculated amount of the margin is reversed in correspondence with account 90 “Sales” subaccount “Cost of sales”:– 6750 rub. – the amount of realized trade margin was reversed; Debit 90-2 Credit 68 subaccount “Sales tax calculations”– 750 rub. – sales tax has been charged and must be paid to the budget; Debit 90-3 Credit 68 subaccount “VAT calculations”– 2500 rub. – VAT has been accrued and must be paid to the budget; Debit 90-2 Credit 44– 3500 rub. (15,750 – 15,750 + 6750 – 750 – 2500) – the financial result from the sale of the refrigerator was determined. A few days later, the buyer, having discovered the defect, returned the refrigerator to the store and demanded payment for it. He attached to his application a cash receipt, a certificate from the warranty repair workshop and a warranty card. Svet LLC accepted the refrigerator and returned the money to the buyer. The accountant reflected the return of the refrigerator with the following entries: Debit 41 Credit 76 – realized trade margin. In accounting, the calculated amount of the margin is reversed in correspondence with account 90 “Sales” subaccount “Cost of sales”:– 15,750 rub. – the returned refrigerator has been registered; Debit 90-3 Credit 68 subaccount “VAT calculations”– 6750 rub. – the amount of the trade margin has been restored; Debit 90-2 Credit 68 subaccount “Sales tax calculations”– 2500 rub. – accrued VAT is reversed; – 750 rub. – accrued sales tax is reversed; Debit 76 Credit 50 Debit 90-2 Credit 44– 15,750 rub. – money was paid to the buyer for the returned goods;
– 3500 rub. – the financial result from the sale of goods is reversed. – end of example –
Trade markup element r.ts. and represents the price of the service for the sale of goods by wholesale, retail and other intermediary and trade-purchasing organizations and firms.
Trade margins (both wholesale and retail) in value terms are determined on the basis of trade markups or percentage discounts. Their sum for the sale of all goods of a trading enterprise forms its gross income. Trade markups, which are predominantly used in the practice of trade organizations of the republic, are set as a percentage of the selling price of the goods (or the price of the importer who imported the goods into the domestic market), which does not include value added tax.
The size of the trade markup can be determined based on the trade discount, and vice versa:
TN=TS/(100-TS)*100
TS=TN/(100+TN)*100
where ТН – trade markup, %; TS – trade discount, %.
The sizes of trade markups (discounts) vary for individual goods and product groups. This difference is determined by the conjuncture of one or another commodity market, i.e. the emerging relationship between supply and demand, the affiliation of trade organizations to various trade systems (Ministry of Trade, Consumer Cooperation, Military Trade, Ministry of Defense), within which their own methods of regulating markups can be used, different levels of distribution costs when selling goods (conditions of transportation, storage, speed circulation, labor intensity of selling goods) and other factors.
The specific amounts of trade markups are established by trading enterprises and organizations themselves, taking into account supply and demand, but not higher than the maximum, if the government of the republic has approved maximum trade markups for such goods.
Maximum trade markups to selling prices are applied to socially significant goods within the limits established by the Ministry of Economy of the Republic of Belarus in accordance with the law.
In the context of the transition to free pricing, when the market is not yet sufficiently saturated with goods, in the sphere of circulation trade organizations and firms have a desire to undeservedly receive high profits through repeated resale of goods. The consequence of the participation of several intermediaries in the sale of goods is an increase in retail prices and a decrease in the purchasing power of the population. Under these conditions, taking into account the real situation government bodies may for some time resort to regulating prices for the services of trading organizations. For example, since 1997, the legislation of the republic stipulates that if goods are purchased from wholesale suppliers, then the total wholesale markup cannot exceed 20%, and the total (wholesale and retail) trade markup should not exceed 30% (except for socially significant goods for which regulation of trade markups is carried out by the Ministry of Economy, regional executive committees and the Minsk City Executive Committee) regardless of the number of participating sellers. In this case, the division of the premium between the wholesale and retail levels is carried out by agreement of the parties.
Markets for consumer goods are formed by territory and local authorities have better information about the state of their market conditions and trading conditions. Therefore, during the transition period, they have the right to regulate the size of trade markups (10–20%), taking into account the actual conditions for the sale of socially significant food and non-food products (bread, milk and lactic acid products, animal butter, beef, pork, poultry and some others) . As the market becomes saturated and market structures are formed, restrictions on trade markups should be lifted. IN Lately The Ministry of Economy of the Republic of Belarus has expanded the list of commodity items for which it is allowed to apply trade and wholesale markups without restrictions, taking into account only the conditions of the consumer market.
Composition of the trade allowance:
Distribution costs of trade organizations include: costs of freight transportation, remuneration of trade workers, costs of maintaining buildings, structures, premises and inventory, depreciation of fixed assets, deductions and costs of repair of fixed assets, costs of storage, part-time work, sorting and packaging of goods, trade advertising, losses goods during transportation, storage and sale within established standards, packaging costs, social contributions, other expenses, taxes and non-tax payments reflected in costs.
Profit in trade margins is determined taking into account the formation of funds for the social needs of enterprises and the development of the material and technical base of trade, payment of taxes from profits (real estate tax, income tax), contributions to the creation of investment funds, as well as joint ventures, joint stock companies, contributions for the maintenance of the management apparatus of ministries, departments, etc. At the same time profitability indicator in trade when pricing is defined as the ratio of profit to the selling price of the product.
Instructions for accounting for retail trade turnover, inventory in trade, retail trade turnover is taken into account in retail prices, including trade markup, value added tax and sales tax.
Like other business entities, trading enterprises pay and make contributions to the republican budget funds(determined from gross income).
Taking into account all components, the size of the trade margin (TM) will be determined:
TN=IO+P+RF
where IO – distribution costs when selling goods, rub., P – profit, rub., RF – amount of contributions to the republican fund, rub.
The required percentage of trade markup is calculated using the formula
%TN=(IO+P+RF)/PS*100
where PS is the purchase price of goods (in selling prices excluding VAT).
Justification of the size of trade markups (discounts) presents certain difficulties. Overestimating their sizes can, on the one hand, lead to difficulties in selling goods due to high prices, a decrease in turnover of funds, and loss of profit. On the other hand, the consequence of their underestimation may be low profitability or unprofitability of trading services. Therefore, in conditions market relations Enterprises and trade organizations are constantly faced with the need to make decisions on the purchase and sale of certain goods and assess the degree of business risk. The feasibility of each transaction should be assessed from the standpoint of the internal capabilities and goals of the trading enterprise: costs of selling goods, estimating sales volume, determining profit and profitability of selling a particular product.