Cost of production refers to the total cost incurred by a business to produce a specific quantity of a product or offer a service. Production costs may include things such as labour, raw materials, or consumable supplies. In economics, the cost of production is defined as the expenditures incurred to obtain the factors of production such as labour, land, and capital, that are needed in the production process of a product.

Cost of Production

For example, the production costs for a motor vehicle tire may include expenses such as rubber, labour needed to produce the product, and various manufacturing supplies. In the service industry, the costs of production may entail the material costs of delivering the service, as well as the labour costs paid to employees tasked with providing the service.

Our experienced costing team has through their respective areas of expertise, can assist you with all your Manufacturing Accounting, Costing and production stages implementation thereof.

KEY TAKEAWAYS

• Production costs refer to the costs a company incurs from manufacturing a product or providing a service that generates revenue for the company.
• Production costs can include a variety of expenses, such as labour, raw materials, consumable manufacturing supplies, and general overhead.
• Total product costs can be determined by adding together the total direct materials and labour costs as well as the total manufacturing overhead costs.

Manufacturing Strategy & Reinvention

A well-designed and effectively executed manufacturing strategy accelerates revenue growth, boosts customer satisfaction and advocacy, unlocks savings and cash flow, and minimizes risks while enhancing reliability. But most manufactures settle for incremental improvements rather than bold reinvention.

Our approach is highly customized to your specific competitive situation, and augmented by a range of best-in-class tools. Some companies will target a complete transformation, while others will pursue discrete initiatives to achieve excellence in select operational areas.

As technology, demographics, government regulations and policies, and a host of other forces alter the manufacturing landscape, and as manufacturers find that they have exhausted the gains that traditional best practices provide, the time is right to take a more ambitious approach to strategy, one that reinvents how you operate—and reignites your growth.