Question

Distinguish between selling cost and production cost with examples

Answer 1

Answer:

According to Chamberlin, cost of production includes all those expenses which are incurred to manufacture and provide a product to the consumer to meet his given demand or want, while the selling costs are those which are incurred to change, alter or create the demand for a product.

Answer 2

Answer:

Production cost refers to everything that will not generate you money. Instead it’s a “cost” or loss. Selling price, adds the utilities to the price, so when you make the sell you are not only covering the production cost, but also making some money for you hard work or aggregated value.

Also, productions costs are only one of the many costs you need to add to your selling price, such as salaries, electricity, inventory storage, machinery, etc.

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