Product cost calculation is an essential part of any business aiming for financial success.
When done effectively and regularly, you know how much money you spent on production. So, you can adjust prices to account for increased costs or other changes in the marketplace. Beas Manufacturing Business Performance can leverage your cost calculation possibilities and help you achieve specific product costing through its Absorption Costing functionality.
If you're thinking about doing all this manually, think again. These tasks take significant time and are prone to error because it's just too easy to forget or miscalculate a step.
Answering the questions below can take hours of manual calculations
- "What are the real costs of my produced items?",
- "Would I still be making money if my products could carry over all my structural costs?"
- "How do the costs of extra hours affect my products' costing?"
Having a robust system supporting your calculations and giving you the correct information ensures you do not lose track of expenses and improve profitability.
Like general ledger accounting, a robust cost accounting provides consistency across multiple products.
With this information available, it's easy to track the profitability of each unit produced during the months or years. It gives you all sorts of insights for controlling costs and making decisions about future production runs on individual items.
Apart from serving as an essential tool to understand your actual manufacturing costs, Absorption Costing may also be a legal requirement in certain countries.
Without an automatic and consistent calculation, executing Absorption Costing might be extremely difficult and consume several working days from your team. A precious time that, otherwise, could be dedicated to transforming costing analyses into a business advantage instead of just performing calculations.
Typically, there are two independent sets of data:
- Product costs, coming either from estimated costs or through the calculation of consumed materials.
- Calculated labor and machine rates will represent how much you have spent on labor, equipment maintenances, quality control, depreciation, and other overhead costs.
But what about analyzing your manufacturing costs in combination with your actual expenses or revaluating your production based on accounted costs? In a wide variety of cases, this information might be crucial for profitability analyses and pricing decisions.
Cost analysis also helps management in critical decision-making processes. Cost analysis allows them to make the right decision on which products to keep in the line-up and which ones should be removed. It helps you decide whether to invest in technology upgrades, such as replacing equipment with more advanced models that use fewer resources and generate less waste.
One of the core concepts that make Beas Manufacturing a successful solution for discrete and process manufacturers is our adherence to SAP AIM or Accelerated Implementation Methodology.
At Boyum IT, we understand your industry and appreciate that choosing the right business solution and technology partner is key to your future success. We currently work with over 620 partners worldwide and provide them with global support from more than 9 locations.
Our partners have access to our Beas Manufacturing specialists for any questions they have around project quality assurance and functional support. Ensuring that you, the customer get the best service.
We provide our partners and customers with on-site training workshops, eLearning courses, and implementation tools founded in more than 17 years of manufacturing experience.