What are the importance of the cost breakdown of a bid items.

What are the importance of the cost breakdown of a bid items.

Expert Solution

Cost breakdown is the systematic process of identifying the individual elements which comprise the total cost of a good, service . It assigns a specific monitory value to each element. Alternately, the value of the individual elements are expressed as a percentage of the total cost.

Useful in justifying the price charged to client
Keeping sellers and providers are accountable
Allow both companies and customers to identify specific reasons for fluctuations in the price
if the client does n't know exactly what the total for a good , service will be,he can estimate the total by looking at the individual elemental cost.
Knowing how total cost breaks also provide a benefit in comparing costs and negotiates better rates
Sellers and providers also can use cost break down to verify that they charged the client every thing.
If the price of a good, service is significantly higher than the breakdown, the company may be charging exorbitantly. If the price is significantly lower than the breakdown, the company likely is taking a loss for working with the client.

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