Information on costing of product

[Bewdarju]

Myself owner of ” REVEL TOY” Organization we are new in the world of manufacturing of toys, we have manufactured a lots of unique toys so we are facing problem in deciding the cost of that toys so I require some information regarding the costing of my product. If any one of you can help me out for solving my trouble so please reply me your suggestion. Help me out of this trouble please.

[Caiden]

Costing mean estimating the profit for the new product that you are had to launch. It is essential because you want to make certain profit with the product. As you have done an investment of huge amount of money in manufacturing of product. You are new in the product development I want to give you information regarding different methods that are available to estimate cost. Some of the methods are as follows:

1. Job Costing: Job costing is method which find the cost of each work order given by the customer. In this method you have to maintain a proper work sheet.
2. Contract Costing: This kind of method is applied in order to do the costing of certain construction work. Each and every contract or job is treated as separate job and maintain a cost unit.
3. Process Costing: This method is used in organization where the production is carried out on the basis of no of process carried out in completing that product. In this method each process cost is estimated and keep the record of that cost.
4. Service Costing: Service costing method is carried out in those industries which render services rather producing goods. In this procedure cost of providing a service is also calculated. This procedure is called service costing.
5. Operation Costing: Operation costing method is carried out in that organization where operation is generally identical.
6. Multiple Costing: Multiple costing means combination of any upper two method of costing.

[Zacharia]

Product costing is the procedure of studying all the various expenses that are invested in the manufacturing and sale of a product, right from start of the process of raw materials purchases till expenses related with transporting the final product to shopkeeper in the market. In today’s period, production of a product's various mechanisms is seldom so matched on highly computerized manufacture lines that there is no necessitate preserving component inventory; thus, the old costing formulas, still used by many industries, are no longer applicable. And further complication will depend on the quality, time, labor etc. These are all very important that you should take care in cost estimation.

[Adrina_g]

As you have to launch new product, it starts to race that depends on its new machinery. Competitors appear and the foundation for competition evolves to other aspect such as time, quantity, quality, or consistency. As everyone knows that cost reduction is the effective way of attracting the customer toward your product. So the term costing is important to each and every organization because more or less the profit of the company depend on cost. Traditionally organizations have given their full attention towards fulfilling a client's necessities. Almost all organizations have view a product's cost as a needy capricious that is the result of the decisions made about a property like products functions, features and performance capabilities. So the cost of the product is generally high. So to reduce the cost target costing is an effective method.
Target costing represents a primarily special way. It is based on following three steps:

1. Costing product price in a manner that is affordable to all the public.
2. Defining product cost as an self-governing variable during the definition of a product's necessities.
3. Actively functioning to get target cost during the manufacturing of product and each process development.