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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