Updating your Production Cost (for Finished Goods)

The SmartB system is able to automatically calculate the cost of Finished Goods (FG) for you. However, in case you need to know how this is done, this unit is here to explain that.

Ps. If you are new to manufacturing or production cost, here is an article to explain this. 

Raw Material (RM) Cost

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Before we start, the first thing to notice is that the cost of RM is already allocated for you in the Bill of Material (blue circle). In the example above, PWG-00002 is a product created from a phantom BOM and the other two were RM directly purchased from relevant suppliers.

Cost of these products can change all the time and this is mainly because of the fluctuation directly from the marketplace. Hence, the system needs to be able to capture this.

Manufacturing firms usually need to update this for accounting purposes. Hence, when you need the latest cost of FG, you can click on

Options > Update Product Cost

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Alternatively, you can do so at the main page. Make sure you check on the relevant BOM items before you update it (see above).

Checking your Cost

Finally, the last step before you’re done is to check that the cost is updated per your expectation. You can check that here:

Main Menu > Product > (Select Relevant Product) > Accounting

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As shown above.

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2 thoughts on “Updating your Production Cost (for Finished Goods)”

    • Correct Answer: b) False

      Explanation: The production cost will be calculated and updated automatically. This session is just for our understanding.

      Reply

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