What does product costing do for you?
Product costing provides the means by which material, labor, subcontract service, and overhead costs are absorbed into item inventory costs and cost of goods sold. Product costing provides the following features and benefits:
•Conforms to general accepted accounting principles and IRS and other tax authority guidelines.
•Calculates the estimated cost of manufactured items.
•Absorbs material, direct labor, subcontract service, and manufacturing overhead costs into the inventory cost of your manufactured items.
•Tracks total WIP value in real time.
•Eliminates the need for associating specific purchases or payroll costs to specific jobs.
•Eliminates the need for period end adjustments to inventory and WIP.
Our design is optimized for small business
We’ve designed our product costing system so that it can be successfully used by companies of any size, especially small businesses, for these reasons:
•Product costing occurs as processes are performed and requires none of the maintenance and adjustments required to adapt a non-WIP system to a manufacturing business.
•Hourly shop rates for direct labor and manufacturing overhead are automatically calculated based on historical job hours and actual costs.
•Absorbed costing occurs automatically as job processes are performed.
Who is this guide for?
This guide is for the benefit of managers, accounting personnel, CPA’s, production planners, and anyone who wants to learn how a WIP-based costing system works or is considering using DBA as a manufacturing solution.
