The information that you willextract from the tenderdocument relates mostly to thetenderspecifications/deliverables, rulesof engagement, submissionrequirements, documentation tomention a few. The extractedinformation will thus enable youto actually prepare and completethe tender document.

Fixed costs are those thatexist regardless of the levelof output or activity.

Key principle of costing is to calculatethe true cost of a product or service

while pricing is determined bydemand

Costs are classified asVariable or Fixed.

Variable costs are thosecosts which vary in direct

proportion to output.

You rent a food wagon to sell hotdogs outside a busy shopping centre. The rent of the food wagon is R100-00per week. Your transport is R50 per week The cost per hot dog is R3-00. Theselling price per hot dog is R4-00. How many hot dogs must you sell tocover the rent of the wagon and yourtransport?

The point where no profit or loss is made:Example:

A profit mark-up is a percentage thatyou add to the cost price of a productto arrive at the selling price e.g. it costyou R100,00 to buy and carry a t-shirt.You then add a mark-up of 35% toarrive at the selling price. Yourcalculation will therefore be asfollows: (R100,00 x 35%) R35,00 + R100,00 R135,00