The cost price is one of the most important components of any sale, because without it it is impossible to correctly calculate the price of a future product or service. Many aspiring entrepreneurs for the first time are faced with the fact that they need to form a cost price. This is where you have to start.
Instructions
Step 1
The estimated cost indicator, which is close to reality, shows how much money has been invested in each specific service or product. Without the cost price, it is impossible to start a sale, and the more accurately it is calculated, the more accurate the expected profit will be. The cost price is the accounting of all production costs, divided by the unit of the supplied product (provided service). The unit of account of production must be defined accurately and cannot be changed in subsequent calculations and adjustments of the cost price.
Step 2
Determine the exact unit of service or product for which the cost will be calculated. This unit should not change in the future, so that you can compare the cost over time.
Step 3
Choose the way in which you will calculate the cost price. There are only 3 methods: boiler, process-based and custom-made. The boiler calculation method is ideal for industries where homogeneous products are produced. In this case, the total amount is simply taken and divided by the number of products. If high- and low-cost products are adjacent to production, it is simply impossible to divide by everything - a rough calculation will not correspond to reality and will direct the pricing policy down the wrong path. In this case, the cost is calculated in two ways: order-by-process and by-process. In the process-by-process method, the cost of all processes involved in the manufacture of the final product is calculated using standard means (accounting for all costs). The total cost is the sum of the cost of all processes. In the order-based method of calculating the cost, the cost per unit of production is calculated as the result of dividing the sum of costs for a separate order by the number of units of products manufactured for it. In this case, it is not the processes and not the time that are taken into account, but the final number of products for a certain period.
Step 4
Add up all the costs that are related to the production of the product. The list of full costs that must be taken into account include:
- material costs;
- personnel costs;
- equipment costs, taking into account depreciation;
- costs of maintenance and control of processes;
- utility costs;
- rental costs;
- other costs for everything related to the organization of the production process.
Step 5
Calculate your unit cost: Divide the total cost by the quantity produced using all of these costs. The resulting result will be the more accurate, the more different costs are taken into account in the summation.
