Product Costing



Costing is a process by which to set a price of a product is calculated by considering all the related factors. Doing Cost Analysis is a very important task for a factory which runs for business purposes. Costing of the products considering the raw material expenditure, salary of officers and workers, distributions and advertisement expenses etc. all direct and indirect expenses is considered very honestly. It is determined by a troop of accountants with advice and consultancy of executive director.

Considering points for costing of a product: The followings are the major points considered for costing of a product,
i. Total dyes and chemical cost.
ii. Total utility cost.
iii. Salary.
iv. Payment.
v. Transport Cost.
vi. Lunch.
vii. Entertainment Cost.
viii. Miscellaneous Cost.
ix. Government Cast Incentive.
Basic Formula of a product price: Basically price of product is determined by the required profit adding to the total expense,
Price of Product = Direct Expenses+Indirect expenses+Factory overhead + Required Profit.

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