Costing a product
- Created by: georgiaxcoxson
- Created on: 28-04-14 20:57
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- Costing a product
- A spreadsheet is used to list the costs involved in making a product.
- Direct costs include the cost of fabrics, component and the labour required to make the product
- The indirect costs are shared out between all the products made and include costs of:
- research
- design and development
- machinery and equipment
- factory overheads (running costs)
- staff training
- Indirect costs: business expenses not directly attributable to any particular product, also known as overheads
- Comparative shops: research activity to compare and contrast two or more similar existing products; results may be presented as a report or in a table
- When a product is made in a large batch or is mass produced, materials can be ordered in bulk and the costs of manufacturing and the overheads can be divided up between a greater number of products, to make each one less costly to produce
- Designers often carry out a comparative shop to examine existing products during research
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