Fear not. Cost Accounting is not the formidable beast in the real world that it was in business school. Well, okay; maybe it is. The painful truth is: To stay in business, you cannot avoid it, at least at a basic level. There is only one way to know if you are pricing your product or service correctly. Costs must be reasonably estimated before you sell anything. Detailed knowledge of the three main factors listed below should drive all your pricing decisions.
- Labor - That part of the cost of goods and services attributable to wages, especially for direct labor. For more details on Labor Costs use this resource at Answers.com.
- Materials - the cost of the raw materials that go directly into a product. From the BNET Dictionary.
- Overhead - expenses that are not directly tied to making or delivering a specific product or service. See this page at BNET for more details.
DMMI Associates can help you with measuring your costs, if you need it.
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DMMI can help you to set a course for stable business growth.
