Forward calculation

A forward calculation is a method used in retail to calculate a sales price. With the help of this calculation, the merchant can achieve a certain profit.

Definition / explanation

The forward calculation is a version of the trade calculation that is used to determine a sales price. When calculating, the retailer starts from the purchase price and suggests cost factors such as transport costs, planned discounts, Overhead, Discount for customers, the expected profit or the value added tax on. If the retailer does not have individual items, these items can simply be left out of the calculation.

If the entire costs have been added to the purchase price, then the retailer receives the gross list sales price, which he can ultimately demand from the customer.

Summary

  • Forward calculation is a method used in retail to calculate the sales price of a product
  • Forward costing is a form of trade costing
  • The result of the forward calculation is the gross list sales price that can be requested by the customer
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