Manufacturing Cost

Definition

Manufacturing cost refers to the expenses incurred in the production of goods, including the cost of raw materials, labor, and overhead. It is the total amount spent to transform inputs into finished products.

Related terms

Overhead Costs: These are indirect costs that are not directly tied to specific products but still necessary for production, such as rent, utilities, and administrative expenses.

Variable Costs: These costs change with the level of production or sales volume, such as raw material costs or direct labor wages.

Fixed Costs: These costs remain constant regardless of changes in production or sales volume, such as rent or machinery maintenance.