Allocating the fund is a crucial process for a business because if funds are misallocated, the business might make wrong decisions to overprice or underpriced a product or invest unnecessary resources in non-profitable products. In order to maximize profit in our business, we find every possible way to minimize costs. While some fixed costs are vital to keeping the business running, we always review the financial statements to identify excessive expenses that do not provide any additional value to core business activities.
The cost structure of the eHelmetz consists of several contents. The cost structure is not always static. It has been vacillating with the customer demand.
We Will Write a Custom Essay Specifically
For You For Only $13.90/page!
As the breakaway positing business, we mainly focused on the premium customer. The cost was also allocated as per the requirement of the customer need and fulfills their satisfaction. Our primary focus is mainly on the safety and style of the trendy environment. These objectives can be including while allotting the budget of the core business and the primary costing parameters are as follows.Research & Development cost: The research team is continuously working on to develop the new product design and implement the technology eHelmetz as a part of the core production. The Research and development cost consists of several practices like Industrial Design, Computer-Aided Design and the software development. In order to upgrade soft ware of the e helmetzs, we still spending extra efforts and investing huge amount of funds tom reach the customer perceived value.
This is generally not so easy task to all the industries but could achieve by experts forum. The overall Research and development cost is around thirty percentage of the all cost of the firm.Manufacturing Cost: It include material cost, overhead cost, production cost, labor cost, packing cost, and equipment cost etc. The majority of the cost structure is based on the manufacturing process. It starts from procuring the raw materials with standard quality. The fixed assets like plant, machinery were planned in the advanced manner to reduce the over head cost .
Skilled labors are always the boon to the industry. Procure the skilled labor and train them in efficient way to achieve the best performance. The production can be reduced by implementing the best technologies. Regular quality audits are needed to be done to achieve the best quality products. As per the product line, there are several models of helmets are designed continuously. The material cost and production cost are choose as accordance with product customizedInventory holding cost: The crucial part of the ecommerce business of eHelmtz is depends on the best practice of the Inventory holding cost.
The best strategies are implemented in order to minimize the inventory holding cost.Other costs: There are several costs which enable in the eHelmetz firm like quality assurance, sales force, market research advertising cost, promotion cost, distribution cost etc.