Finished goods costs take into consideration the costs defined in the formula and bill of materials during product development, as well as additional costs and loss factors encountered during production. Static and variable costs embedded within formulas and bills of material contribute to the costs of finished goods. These costs consist of fixed setup charges, scalable labor, tiered labor, markups, margins and losses that may be automatically adjusted based upon the total batch size at time of production. Further costing analysis and approvals can be performed during production, when adjustments are being made to the batch job formula.
Costing allows Cost Accountants to approve newly developed and revised formulas and bills of materials during product development and production.
- Perform “what-if” cost scenarios
- Approve formula and bills of materials based upon costs
- Compare costs of finished goods in different packaging configurations
- Analyze expected vs. actual costs of finished goods
What Costing can do for You!
You can compare actual costs against expected costs to determine which processes are to be streamlined then standardized, as well as if any finished goods costs need to be updated in your financial system. With a tighter control over finished goods costs and prices, from the time of product development through batch production, you can achieve the highest margins for your goods.