Cost & Revenues Of A Firm/Business??

Question

A few questions for you:

Does a firm know its costs before it knows its revenues?

What is the ideal relation between knowledge of costs and knowledge of revenues?

If this was your firm, what ways could you obtain the ideal relation?

Answer 1

- A good firm/ business would already understand most of its major cost on every revenue they;re going to generate. Either it's a cost plus approach or target costing approach, these information are needed to ensure that the business makes a profit.

- Ideal relation is that you always know your cost. This way, you can concentrate on how to make the revenue/ get the market. If you don't know how to make the sales as yet, you are at least can control your cost.

- Know your industry, know your supplier, think outside the box, use target costing approach if you are a newcomer.