Direct Costs, Indirect Costs (Overheads and G&A)

Knowing the overhead costs is essential to any manufacturer in calculating the total cost of manufacturing of a product and hence to set a profitable selling price. The buyer should always know what is the overhead cost and indirect cost included in the product as a percentage of the cost of the product that the …

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Prime Costs, Conversion Costs, BOM and GP in Manufacturing

When you talk to manufacturers, they frequently use a term called ‘conversion costs’ and a few of them also use the term ‘Prime Costs’ (especially used by Chinese vendors). A typical manufacturer would look at charging you as below: So, you could guess: Conversion Cost is the total cost that is borne by the manufacturer …

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