Accounting

Inventory Valuation Methods – Finding the Right Approach

For the financial departments of manufacturing companies, few things are as important as inventory valuation. Due to the effect on the gross profit of a company, choosing the right inventory valuation method is a crucial step in ensuring the financial health of your company.

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Production Costs – A Simple Guide

There are several ways to classify the costs associated with the production of goods. Production managers rarely need to look away from total manufacturing costs, which consist of direct material costs, direct labor costs, and manufacturing overheads. However, production accountants and business owners often need to see the bigger picture.

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Inventory Costs – A Quick Overview

Inventory costs make up a substantial part of any manufacturing or distributing company’s total expenses. To ensure the good financial health of your business, it is necessary to know how to make sense of these expenses and how to balance them.

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What Is Job Costing and How to Do It?

Job costing means tracking the costs related to individual orders. This allows accounting to measure the profitability of each project separately and to use it as a basis for customer quotes and financial planning.

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Capacity Planning – An Essential Guide for Manufacturers

Capacity planning is an essential tool used in well-functioning manufacturing companies. It determines the necessary capacity required to meet demand and as such, it is a prerequisite for efficient production scheduling, supply chain planning, inventory management, and any other aspect of the business.

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How to Calculate Total Manufacturing Cost?

Total Manufacturing Cost is an essential metric for understanding the productivity and profitability of a business. Among other things, it can be used to adjust the selling price of your products and to identify and cut unnecessary expenses.

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How to Calculate the Cost of Goods Manufactured (COGM)?

Knowing your Cost of Goods Manufactured is a good way of getting an overview of production costs and how they relate to the bottom line. Calculating COGM allows management to identify cash drains, adjust prices, and track the development of the business. You can also listen to this article:

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What is Cost of Quality and How to Calculate It?

The Cost of Quality is the sum of the costs related to providing a quality product and the costs related to not providing a quality product. While an effective measure to identify cash drains, it can also be used to balance the price and quality relationship of your products.

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