CHAPTER I

PRELIMINARY

1.1.Background

Sales is the activity that aim to find, influence and give instructions to buyers to
be able to adjust their needs to the products offered and enter into agreements
regarding prices that are beneficial to both parties (Moekjiat, 2000). The industrial
world is always in competition between one company and another. Prediction is a
combination of art and science in estimating future situations, by projecting past
data into the future using mathematical models and subjective estimates
(Montgomery, 1990). Sales level predictions that can be used as a reference, to
increase profits are sales data for activities that tell monthly, yearly sales data and
product marketing areas. In general, a company has a target or goal for achieved,
one of these goals is to get high profits by minimizing the expenses incurred in the
production process. The elements that form part of profit are income and costs.
Cost is one of the most important sources of information in the company's
strategic analysis. The process of determining and analyzing costs in the company
can describe a company's performance in the future. Basically the problem that
often arises in a company is planning costs by a company not in accordance with
what actually happened (cost realization). Therefore to be able to achieve efficient
production, a control of the production costs will be needed.

1.2.Formulation of The Problem

a. What is sales?
b. What should be known in the world of sales?
c. What are the types of sales?
d. What kinds of sales transactions?
e. What is the purpose of sales in business management?
f. How to increase sales in business management?
g. What is costs?

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h. What are the types of costs?
i. How to find out the costs in the selling price of a product?

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 CHAPTER II

DISCUSSION

2.1.Sales
2.1.1. Definition of Sales

According to Kotler, “Sales is a process where the needs of buyers and the
needs of sellers are met, through the interchange of information and interests.”

Definition of Sales According to Reeve, Warren and Duchac, “Sales is the total
amount charged costumers for merchandise sold, including cash sales and sales on
account.”

As quoted from Wikipedia. Definition of Sales is the activity or business of

selling products or services. In the sales process, the seller or provider of goods and
services gives ownership of a commodity to the buyer for a certain price. Sales can
be done through various methods, such as direct sales, and through sales agents. In
general, the definition of sales is the total amount charged to customers for goods
or services that are sold, both on credit and cash.

2.1.2. Things to Know in The World of Sales

a. Specializing in selling one thing.
b. Create a list of prospects for your customers.
c. Perform Research preemptively.
d. Conversation.
e. Meet prospects quickly.
f. Focus on Customers.
g. Adapting to the Purchasing Process.
h. Building Long-Term Relationships.

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2.1.3. Types of Sales
a. Cash sales. A business may sell merchandise for cash. Cash sales are
normally entered (rung up) on a cash register and recorded in the accounts.
b. Sales on account. A business may sell merchandise on account. The seller
records such sales as a debit to Account Receivable and a credit to Sales.

2.1.4. Kinds of Sales Transactions

a. Cash sales. Is a sale that is cash and carry. In general, it occurs in cash and
payments can also occur for one month is considered cash.
b. Credit sales. It is sales with an average grace period of over one month.
c. Tender sales. It is sales that are carried out through tender procedures to win
tenders in addition to meeting various procedures.
d. Export sales. Is a sale carried out with a foreign buyer who imports the item.
e. Consignment Sales. Is the sale made by deposit to buyers who are also
sellers.
f. Wholesale sales. Is a sale that is not direct to the buyer, but through a
wholesaler or retailer.

2.1.5. The Purpose of Sales in Business Management

The purpose of the sale is to bring profits or profits from the products or
services produced by the producer with good management and also expect
maximum profits. However, this needs to increase the performance of the
distributor in ensuring the quality and quality of goods or services that will be sold.
Achieve a goal that is in the company every sale must have a sales goal achieved.

2.1.6. Increase Sales in Business Management

Increasing sales and gaining profits is at the core of a business company.
Both of these determine whether or not a company lives, which can be seen from
the smoothness of the company in recruiting employees, buying company
equipment, producing products, or providing improvements in services.

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How to:
a. Expanding Business Targets
b. Review the price of a product or service
c. Make a promotion program
d. Maintain customer loyalty

2.2.Costs
2.2.1. Definition of Costs
According to Hansen and Mowen (1999), translated by Hermawan, A.A.,
the cost is the cash or cash equivalent values are sacrificed to obtain goods or
services that are expected to benefit current or future for the organization.
Carter and Usry (2002) define costs as ”an exchange price, a forgoing, a
sacrifice made to secure benefit … the forgoing or sacrifice at date of acquisition is
represented by a current or future diminution in cash or other assets.”
”every expense is a cost, but not every cost is an expense; assets are costs, for
example, but th ey are not (yet) expenses”. So, all expenses are costs, but costs are
not necessarily a burden.

Carter and Usry also gave an example that ”… purchase of raw materials
for cash … The materials are acquired at some cost, but they are not yet an expense.
When the firm later sells … , the cost of materials is written off among expenses on
the income statement”. So, for example the purchase of raw materials with a certain
amount of money, costs arise. The new costs are recognized as expenses after
finished good (made from the raw material) sold by the company.

2.2.2. Types of Costs

The purpose of preparing an external financial report.

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 1. Product costs, namely costs related to costs related to both the purchase and
production of goods. More than just a manufacturing company, only in three
broad categories:
a. Direct materials.
b. Direct labor.
c. Factory overhead.
2. Periodic costs, which are all costs not included in product costs (non-
production). Non-production production costs:
a. Sales and marketing costs
b. Administrative costs for executive, organizational, and clerical costs
related to general organization management.

The purpose of predicting cost behavior to respond to changes in activity.

1. Variable costs is costs that change in proportion to changes in activity.

Activities can be realized in various forms such as units produced, units sold,
kilometers, working hours, and so on. Examples of variable costs are direct
materials costs.
2. Fixed costs is costs that always remain overall without being affected by the
level of activity.

The purpose of determining costs to cost objects such as departments or

products

1. Direct costs is costs that can be easily traced to the relevant cost object. The
concept of direct costs is broader than the understanding of direct materials
and direct labor.
2. Indirect costs is costs that can’t be easily traced to the relevant cost object.

The purpose of decision making

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 1. Differential costs. Every alternative business decision can obtain certain
cost and benefit consequences. The cost difference between the two decision
alternatives is called differential cost.
2. Opportunity cost is a potential benefit that will be lost if one alternative has
been chosen from a number of available alternatives.
3. Sunk costs are costs that have occurred and cannot be changed by any
decisions that are made now or in the future. Because sunk costs cannot be
changed by any decision, sunk costs are not differential costs. For example,
depreciation of fixed assets.

2.2.3. Determine Costs in The Selling Price of The Product

There are several ways to determine the selling price of a product, including:

1. Know the cost of goods first.

2. Adjust to market conditions.
3. Pay attention to the prices sold by competitors.
4. Use a small profit system but sell well.
5. Determining prices does not only calculate the cost of goods.

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 CHAPTER III
CLOSING

Conclusion
Sales is the activity or business that sells products or services. In the sales
process, the seller or provider of goods and services gives ownership rights to the
buyer for certain goods. Sales can be done through various methods, such as direct
sales, and through sales agents. The cost is all the sacrifices that need to be done
for a production process, which is expressed in units of currency according to the
prevailing market price, either already happened or will happen. Knowing about
the sale and the cost can reach a goal of companies that expect to benefit.