Quote:
Originally Posted by DMcCunney
It sounds to me like a number pulled out of someone's butt, as a best guess in absence of knowledge. I have no idea what that number ought to be, but suspect it will continuously vary as conditions change, and will not be the same for all houses.
See my prior message for commentary about Cost Of Goods Sold.
______
Dennis
|
That's what I thought about the figure too. I've had some experience with internal allocation of overheads and other costs, and have come across more than a few cases where the allocation is not meant to be accurate but serves some other purpose, such as minimising taxation or achieving some political aim. It does occur to me that players in an industry without price competition would not exactly encourage regulatory attention by publicising very high costs to all and sundry, nor would this encourage potential new entrants. And, of course, the actual figures are closely guarded secrets.
Thanks for your reply. It is not the practice of allocating overheads which is of course essential which I question. It is simply this particular figure. I should have been clearer.