SOME ASPECTS OF DISTRIBUTION COST ANALYSIS.

The article reports on distribution cost analysis and cost accounting, which can be applied to justify price differentials under the Robinson-Patman Act. The author reports that marketing expenses are typically aligned with the number of customers or orders, and not the volume of sales. The goal of distribution cost analysis is to determine which sales are unprofitable. The procedures for determining individual product sales profitability are presented. Management interpretation of distribution cost analysis is discussed and the author suggests management will use this data to maximize profits in either the short or long term.