Product Cost Excel Template

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Let us take the example of a company that is engaged in manufacturing shoes in the Canadian province of Alberta. Recently
collected information pertaining to production cost. The following information has been confirmed by the company’s accou
$1,000,000 expensed on leather and stitching thread,$350,000 paid for cobbler’s wage and $20,000 for security’s salary
$10,300 worth of greasing oils used for machine maintenance,$7,700 incurred as factory rent and utilities
Calculate the product cost of the company based on the given information.

Particulars Amount
Direct Material Cost (Leather and $1,000,000
Stitching Thread)
Direct Labor Cost (Cobbler’s Wages) $350,000
Indirect Material Cost (Greasing Oil) $10,300

Indirect Labor Cost (Security’s Salary) $20,000

Other Overhead Cost (Factory Rent and $7,700

Utilities)

Manufacturing Overhead Cost is calculated using the formula given below

Manufacturing Overhead Cost = Indirect Material Cost + Indirect
Labor Cost + Other Overhead Cost

Manufacturing Overhead Cost $38,000

Product Cost is calculated using the formula given below

Product Cost = Direct Material Cost + Direct Labor Cost + Manufacturing Overhead Cost

Product Cost $1,388,000

an province of Alberta. Recently the company
nfirmed by the company’s accounts department:
$20,000 for security’s salary
nt and utilities
Let us take the example of a company that is associated with the manufacturing of mobile phone covers. The company is pla
to bid for a large volume (1,000,000) 6-monthly contract at the rate of $4.00 per piece. So, the management decided to dete
the per-unit production cost incurred during last year. As per the account’s department, the following information is availab
Based on the given information, Calculate whether the company should go ahead with the bidding process.

Particulars Value
Production Volume (pieces) 3500000
Direct Material Cost $7,000,000
Direct Labor Cost $1,800,000
Indirect Material Cost $900,000
Indirect Labor Cost $300,000
Other Overhead Cost $500,000

Manufacturing Overhead Cost is calculated using the formula given below

Manufacturing Overhead Cost = Indirect Material Cost + Indirect
Labor Cost + Other Overhead Cost

Manufacturing Overhead Cost $1,700,000

Product Cost is calculated using the formula given below

Product Cost = Direct Material Cost + Direct Labor Cost + Manufacturing Overhead Cost

Product Cost $10,500,000

Production Cost per Unit is calculated using the formula given below
Production Cost per Unit = Product Cost / Production Volume

Production Cost per Unit $3

one covers. The company is planning
e management decided to determine
ollowing information is available,
dding process.