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Types of manufacturing cost

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Food and Agricultural Produce
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Andrea T.
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Aug 20, 2020
What are the types of manufacturing cost?

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Aug 20, 2020

There are 4 common types of manufacturing cost:

  • Direct Labor Costs Paying wages to employees will be one of your major manufacturing expenses. You will need to constantly monitor this cost to make sure you are getting enough production for the money you are putting into labor.
  • Materials Costs The cost of raw materials used in the manufacturing process is one of the most common manufacturing expenses companies measure. You should always strive to deal with vendors to get the lowest possible prices on raw materials, and you should initiate quality control methods to avoid wasting raw materials.
  • Indirect Overhead Your manufacturing facility incurs expenses whether you are manufacturing or not. These costs include utilities, rent or mortgage payments, depreciation on equipment and security.
  • Incidental Expenses In addition to the three most common manufacturing costs, you have expenses for supplies such as tools, tape, lubricants and safety gear.
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