Question

In: Economics

when determining the cost of manufacturing a product, whay considerations are included in the cost?

when determining the cost of manufacturing a product, whay considerations are included in the cost?

Solutions

Expert Solution

factors affecting the cost of manufacturing of a product

1. cost of raw materials, the more is the cost of raw materials the more will be the cost of production

2. the use of technology involved in the production of the good, some goods manufacturing requires huge machinery which is quite expensive while some goods require small scale production techniques.

3. the availability of cheap and skilled labor required for the production oif that good.

4. government support and costs required for licenses for the production function to take place.

5. the subsidies and govt schemes that are related to the manufacturing of that particular good.

6. the price of oil and transportation play a major role in any production industry,

7. the type of market for the good that we are manufacturing also plays a role in determining the cost of the good manufactured.

8. If you want something quickly this can impact the cost depending on the project. Manufacturing a product quickly is more expensive than a longer lead-time. It’s all about resource management for the manufacturer. A quick turnaround means dedicating more resources, both in terms of manpower and machinery, which will inevitably be a bit pricier than a longer turnaround time

9.

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Determining direct or indirect cost, when determining your home budget such as
Determining direct or indirect cost, when determining your home budget such as: Mortgage, Electric Bill, Home Insurance, Health Insurance, Daycare, Food, Tax preparation and Allowance for children which is Direct or Indirect?
What costs are included in determining the total cost of an asset? Why would a company...
What costs are included in determining the total cost of an asset? Why would a company include more than just the purchase price of an asset? Some argue that companies depreciate assets because they lose value. From a financial accounting perspective, is this true? Why or why not?
What costs are included in determining the total cost of an asset? Why would a company...
What costs are included in determining the total cost of an asset? Why would a company include more than just the purchase price of an asset? Some argue that companies depreciate assets because they lose value. From a financial accounting perspective, is this true? Why or why not?
When determining incremental unlevered net income, should all the expenses listed be included? If not, what...
When determining incremental unlevered net income, should all the expenses listed be included? If not, what expenses should we exclude and why? Initial Capital Expenditure Useful Life of Equipment Annual Depreciation Sales in Year 1 Sales Growth through Year 6 Sales Growth Year 6 Onward Free Cash Flow Year 6 Onward Cost of Goods Sold (% of sales) Incremental SG&A Expense                 25% of the Incremental SG&A Expense is an overhead expense that will be incurred even if                  the project...
whay is the most important thing of opportunity cost? and the important of scarcity influence decisition...
whay is the most important thing of opportunity cost? and the important of scarcity influence decisition ?
What costs are included in the initial cost of property, plant, and equipment when they are...
What costs are included in the initial cost of property, plant, and equipment when they are purchased? What is the rationale for including costs in addition to the purchase price of the asset? please answer in your own words, do not use the outside resources
If Job Q included 30 units, what was its unit product cost?
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments—Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March): Molding Fabrication Total Estimated total machine-hours used 2,500 1,500 4,000 Estimated total fixed manufacturing...
1. What cost are included in Manufacturing Overhead? 2. What are the three methods that can...
1. What cost are included in Manufacturing Overhead? 2. What are the three methods that can be used to allocate overhead cost? 3. Explain the Direct cost of overhead allocation?
MFG Manufacturing sells a product for $40 per unit. The production cost of the product is...
MFG Manufacturing sells a product for $40 per unit. The production cost of the product is $21 per unit: direct materials of $8, direct labor of $7, variable overhead of $4 and fixed overhead of $2. The fixed overhead per unit comes from dividing $500,000 of fixed factory overhead by 250,000 units produced. In addition, MFG pays $3 for shipping each unit sold. Finally, MFG has fixed costs outside the factory (such as office building depreciation and salaries) that total...
Determining opportunity cost
  Juanita is deciding whether to buy a suit that she wants, as well as where to buy it. Three stores carry the same suit, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $112 for the suit:   Store Travel Time Each Way Price of a Suit (Minutes) (Dollars per suit)...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT