cost of production

How to Calculate the Cost of Production?

1. Direct Costs
Calculate direct costs by summing up expenses like raw materials and direct labor. These are costs directly tied to the production of goods.
2. Indirect Costs
Indirect costs, such as utilities and administrative expenses, should be allocated proportionately to different projects or products.
3. Total Cost of Production
The total cost of production is the sum of direct and indirect costs. This gives a comprehensive view of all expenses involved in producing a product.

Frequently asked queries:

Relevant Topics