4:41 AM
soe
COST
OF PRODUCTION
For the
company's factory / manufacturing, the cost of
production (HPP) or there is also a call cost
of production is all it costs to produce a
product / service to be sold during the
period. So in essence no different from the prices
or costs for finished goods for sale.
Production
costs, relating to the calculation of the cost of
production or cost of goods soldis often called, consists of:
- The
cost of direct materials
- The
cost of direct labor
- Overhead
costs (for goods produced in a
factory called factory overhead)
CALCULATION
OF COST OF PRODUCTION =
Initial stock of
intermediate
goods used raw materials + wages + direct labor +manufacturing
overhead costs - the end of semi-finished
goods inventories of rawmaterials used = Beginning
inventory + purchases - ending inventory
If
the direct materials plus
the direct wage costs is called the Primary
Direct wages plus
the cost of factory overhead is
called Conversion. For manufacturing companies, cost
of conversion can be considered a direct cost
to convert the material into a final product.
Posted in: 
0 comments:
Post a Comment