What is Manufacturing Cost?
Manufacturing cost is the cumulative total of resources that are directly used in the process of making various goods and products. In some formulas, the cost of manufacturing includes the expenses associated with the purchase of raw materials. At other times, the cost for raw materials is excluded. In general, factors such as labor, equipment operation, and the general overhead for maintaining the production facility are common components that are included in determining the overall manufacturing costs. Since the goal of most production companies is to earn a profit by selling goods manufactured and sold by the company, paying close attention to the overall manufacturing cost is extremely important. By monitoring the various elements that make up the cost for manufacturing, it is possible to ensure that available resources are being used to best advantage, and thus earning the highest amount of return on each unit that is sold at the current price. When this monitoring activity indica
