Costing a product

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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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