Manufacturing cost is the sum of costs of all resources consumed in the process of making a product. The manufacturing cost is classified into three categories: direct materials cost, direct labor cost and manufacturing overhead.[1] It is a factor in total delivery cost.[2]
Direct materials are the raw materials that become a part of the finished product. Manufacturing adds value to raw materials by applying a chain of operations to maintain a deliverable product. There are many operations that can be applied to raw materials such as welding, cutting and painting. It is important to differentiate between direct materials and indirect materials.
Direct labour costedit
The direct labour cost is the cost of workers who can be easily identified with the unit of production. Types of labour who are considered to be part of the direct labour cost are the assembly workers on an assembly line.
Manufacturing overheadedit
Manufacturing overhead is any manufacturing cost that is neither direct materials cost nor direct labour cost. Manufacturing overhead includes all charges that provide support to manufacturing.
Manufacturing overhead includesedit
Indirect labour cost: The indirect labour cost is the cost associated with workers, such as supervisors and material handling team, who are not directly involved in the production.
Indirect materials cost: Indirect materials cost is the cost associated with consumables, such as lubricants, grease, and water, that are not used as raw materials.
Other indirect manufacturing cost: includes machine depreciation, land rent, property insurance, electricity, freight and transportation, or any expenses that keep the factory operating.
Referencesedit
^Ostwald, P. F., McLaren, T. S. (2004), Cost Analysis and Estimating for Engineering and Management, Prentice Hall, ISBN978-0-13-142127-1
^Schaefer, Ted; Kosansky, Alan (2014). "A fresh approach to improving total delivered cost". Supply Chain Quarterly. Retrieved 24 March 2020.
Further readingedit
Lanen, W. N., Anderson, S., Maher, M. W. (2008). Fundamentals of cost accounting, McGraw Hill, ISBN978-0-07-352672-0
February 16, 2024
manufacturing, cost, this, article, needs, additional, citations, verification, please, help, improve, this, article, adding, citations, reliable, sources, unsourced, material, challenged, removed, find, sources, news, newspapers, books, scholar, jstor, januar. This article needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Manufacturing cost news newspapers books scholar JSTOR January 2024 Learn how and when to remove this template message Manufacturing cost is the sum of costs of all resources consumed in the process of making a product The manufacturing cost is classified into three categories direct materials cost direct labor cost and manufacturing overhead 1 It is a factor in total delivery cost 2 Contents 1 Direct materials cost 2 Direct labour cost 3 Manufacturing overhead 3 1 Manufacturing overhead includes 4 References 5 Further readingDirect materials cost editDirect materials are the raw materials that become a part of the finished product Manufacturing adds value to raw materials by applying a chain of operations to maintain a deliverable product There are many operations that can be applied to raw materials such as welding cutting and painting It is important to differentiate between direct materials and indirect materials Direct labour cost editThe direct labour cost is the cost of workers who can be easily identified with the unit of production Types of labour who are considered to be part of the direct labour cost are the assembly workers on an assembly line Manufacturing overhead editManufacturing overhead is any manufacturing cost that is neither direct materials cost nor direct labour cost Manufacturing overhead includes all charges that provide support to manufacturing Manufacturing overhead includes edit Indirect labour cost The indirect labour cost is the cost associated with workers such as supervisors and material handling team who are not directly involved in the production Indirect materials cost Indirect materials cost is the cost associated with consumables such as lubricants grease and water that are not used as raw materials Other indirect manufacturing cost includes machine depreciation land rent property insurance electricity freight and transportation or any expenses that keep the factory operating References edit Ostwald P F McLaren T S 2004 Cost Analysis and Estimating for Engineering and Management Prentice Hall ISBN 978 0 13 142127 1 Schaefer Ted Kosansky Alan 2014 A fresh approach to improving total delivered cost Supply Chain Quarterly Retrieved 24 March 2020 Further reading editLanen W N Anderson S Maher M W 2008 Fundamentals of cost accounting McGraw Hill ISBN 978 0 07 352672 0 Retrieved from https en wikipedia org w index php title Manufacturing cost amp oldid 1195643360, wikipedia, wiki, book, books, library,
