scholarly journals Knowing Your Product Costs: A Primer for Farmers and Food Entrepreneurs

EDIS ◽  
2021 ◽  
Vol 2021 (6) ◽  
Author(s):  
Kevin Athearn ◽  
Mark Yarick ◽  
Natasha Parks
Keyword(s):  
Cost Analysis ◽  
Food Processing ◽  
Software Tools ◽  
Business Decisions ◽  
Product Costing ◽  
Cost Calculations ◽  
Product Costs

This publication provides a basic introduction to product costing for farm businesses and food processing enterprises. It describes cost concepts, provides product costing examples, and briefly discusses software tools that can assist with cost analysis. The publication is intended to help farmers and food entrepreneurs understand product costing concepts and do their own cost calculations to assist with business decisions.

Improving Manufacturing Management with Activity Based Costing

2012 ◽  
Vol 472-475 ◽  
pp. 2494-2501 ◽  
Author(s):  
Michael L. Werner ◽  
Fu Yuan Xu
Keyword(s):  
Financial Reporting ◽  
Cost Savings ◽  
Indirect Costs ◽  
Labor Cost ◽  
Activity Based Costing ◽  
Labor Costs ◽  
Product Cost ◽  
Manufacturing Enterprises ◽  
Product Costing ◽  
Product Costs

The calculation of product cost in modern manufacturing enterprises includes assigning direct costs and indirect costs (overhead) to products. Direct material and direct labor costs can be traced to individual products or batches of products. However, because overhead is an indirect cost and benefits more than one product, it is difficult if not impossible to determine the true overhead cost associated with the overhead resources consumed to manufacture individual products produced. The factory resources included in overhead are an important component of manufacturing product. Overhead costs have traditionally been allocated to products using allocation bases which are correlated to the incurrence of cost such as direct labor hours, direct labor cost, or machine hours using one or few plant-wide allocation base for this purpose. The resulting product costs are used for external financial reporting and are also often used internally as a source of information for management decisions. The information provided by traditional cost systems is often so inaccurate it causes managers to do the wrong things. Further, traditional product costing offers little help to managers in their efforts to reduce costs. Activity based costing is a technique that allocates cost based on activities and volumes that cause cost. The use of these cost causes, called cost drivers, significantly increases product cost accuracy and also encourages managers to take cost-cutting actions that result in true cost savings to the firm. This paper will explore activity based costing and how it can help manufacturers to increase product cost accuracy and to reduce costs.

EU demonstration project for separate discharge and treatment of urine, faeces and greywater – Part II: Cost comparison of different sanitation systems

2007 ◽  
Vol 56 (5) ◽  
pp. 251-257 ◽  
Author(s):  
M. Oldenburg ◽  
A. Peter-Fröhlich ◽  
C. Dlabacs ◽  
L. Pawlowski ◽  
A. Bonhomme
Keyword(s):  
Cost Analysis ◽  
Nutrient Recycling ◽  
Economic Benefits ◽  
Demonstration Project ◽  
Cost Comparison ◽  
Sewer Systems ◽  
Cost Calculations ◽  
Sanitation Systems ◽  
The Cost ◽  
The Eu

The experience from the EU demonstration project was used for a cost analysis of different sanitation systems with regard to nutrient recycling. The analysis was made for an existing residential area, for which the different sanitation systems have been applied. The cost calculations were made for a lifetime of 50 years. The multiple sewer systems cause higher investment costs, mainly for the installation of the additional facilities; the investment costs for the treatment are lower. The cost analysis did not prove lower costs for the new sanitation concepts in this special case in comparison with the conventional system. Economic benefits are demonstrated for the operation costs. The result will be reinforced by the consideration of an increase of the energy costs. The revenues for the nutrient related products have only a very small impact on the result.

scholarly journals Çanakkale’de Tarımsal Faaliyet Gösteren İşletmelerin Üretim Tercihlerinin Ürün Maliyetleriyle Değerlendirilmesi

2019 ◽  
Vol 7 (11) ◽  
pp. 1990
Author(s):  
Burak Kocaköse ◽  
Duygu Aktürk
Keyword(s):  
Sampling Method ◽  
Sample Volume ◽  
Corn Seed ◽  
Face To Face ◽  
Silage Maize ◽  
Cost Calculations ◽  
Product Costs ◽  
Land Size ◽  
Hierarchy Process ◽  
Input Prices

This study was conducted in Kumkale Plain of Çanakkale Province. In this research, it is aimed to determine which factors the regional farmers take into consideration in their production and the costs of the products they obtain. The data of the study consisted of primary and original questionnaires provided through face-to-face interviews. The sample volume was determined by stratified sampling method and 99 questionnaires were conducted. The enterprises are ranked according to land size and divided into three layers as 1-50, 51-100, 101 decare and above. Analytical Hierarchy Process (AHS) method was used to determine producer preferences as well as simple cost calculations. The criteria of the study were determined as mechanization, irrigation facilities, supply of inputs, marketing opportunities, aquaculture information, product prices, input prices and labor force. According to the results of AHS obtained from the study, wheat ranked first with 0.213 points and sunflower ranked second with 0.196 points. The remaining alternatives are paddy, tomato, corn (seed) and silage maize respectively. According to AHS results, wheat, sunflower, paddy, tomato, corn and silage maize are preferred. Product costs are calculated as follows; 0.52 TL/kg for tomatoes, 1.56 TL/kg for paddy , 1.16 TL/kg for grain corn, 0.14 TL/kg for silage maize, 0.69 TL/kg for wheat and 1.44 TL/kg for sunflower.

Product Costing and Pricing under Long-Term Capacity Commitment

2002 ◽  
Vol 14 (1) ◽  
pp. 79-97 ◽  
Author(s):  
Rajiv D. Banker ◽  
Iny Hwang ◽  
Birendra K. Mishra
Keyword(s):  
Demand Growth ◽  
Pricing Decisions ◽  
Product Costing ◽  
Optimal Capacity ◽  
New Information ◽  
Capacity Choice ◽  
Cost Parameters ◽  
Product Costs ◽  
Second Period

We develop a model to analyze optimal product-costing and pricing decisions in a dynamic information environment under long-term-capacity commitment. The arrival of new information about demand and cost parameters each period makes the problem complex. The optimal prices and capacity choices in our model cannot be decoupled as in Banker and Hughes' (1994) single-period model. The optimal prices are based on product costs that are adjusted each period to reflect changes in expected variable costs as well as utilization of fixed activity resources. The charge for each fixed resource is monotonically increasing in the expected demand for that resource in each state given the optimal capacity choice. The average optimal prices across periods and states are similar to Banker and Hughes' (1994) benchmark prices. Finally, we investigate a two-period version of the model to explore the optimality of carrying idle capacity. The optimal product-cost charge for fixed capacity is strictly less in the first period than in the second period when the firm expects demand growth.

ters or direct labor hours). This method allowed cost prices to be determined at each successive stage of the production process. The addition of the charges incurred at one level of production to the previous charges provided the cost of the product at that par­ ticular production level. However, since the method did not pro­ vide the original breakdown of the various cost components, com­ ponents had to be recomputed on a separate schedule. The homo­ geneous sections method was adopted in the plan for cost compu­ tations because it allowed precise calculations, and afforded great possibilities of application to various situations. Another characteristic related to product costing introduced in the French Plan was the use of mirror or contra-accounts which allowed product costs to be computed without altering expense accounts. In fact, charges were debited to the appropriate cost accounts by crediting contra-accounts, which preserved the infor­ mation registered in financial accounting’s expense accounts while ensuring the identity of the information carried from financial accounts to cost accounts. Second, the rational classification (discussed in the next sec­ tion) which had developed in France in the 1920s [CNOF, 1946, p. 46] and which, by the 1940s, had been widely adopted by the majority of French enterprises for their balance sheets [CNOF, 1946, p. 23] inspired the 1942 Plan's standard balance sheet. How­ ever, the rational classification was not retained for the 1942 Plan’s chart of accounts since it was inspired by the German chart. The 1942 Plan was mainly criticized for its lack of logic and its complexity, and for being overly oriented toward the determi­ nation of financial results for external purposes, and of product costs for internal and external pricing of products. Not enough attention was paid to the role of accounting in the daily manage­ ment of operations [Brunet, 1951, pp. 252-253]. The other major criticism addressed to the Plan concerned the duality of the operations account and the profit and loss ac­ count, stemming from the possibility of classifying expenses either by nature or by function depending on whether the cost classes (5, 6 and 7) were used or not. This situation deprived national ac­ countants of valuable information needed in the preparation of national accounts [Brunet, 1951, p. 2521. As will be seen in a later section, this criticism was taken into account in the drafting of the 1947 Plan. An official adaptation of the 1942 Plan was only produced for the aeronautic industry. However, Brunet [1951, p. 254] mentions that a number of major companies also adopted the general plan,

2014 ◽  
pp. 341-341
Keyword(s):  
Balance Sheet ◽  
National Accounts ◽  
Balance Sheets ◽  
Product Costing ◽  
General Plan ◽  
Operations Account ◽  
The Cost ◽  
Product Costs ◽  
Rational Classification

Product Costs as Decision Aids: An Analysis of Alternative Approaches (Part 1)

2011 ◽  
Vol 26 (1) ◽  
pp. 1-20 ◽  
Author(s):  
Ramji Balakrishnan ◽  
Eva Labro ◽  
K. Sivaramakrishnan
Keyword(s):  
Decision Aids ◽  
Resource Consumption ◽  
Activity Based Costing ◽  
Numerical Example ◽  
Product Costing ◽  
Multiple Dimensions ◽  
Alternative Approaches ◽  
Product Costs ◽  
Common Platform

SYNOPSIS In this first part of a two-part paper, we develop a common platform to characterize several popular approaches for computing product costs. We describe four kinds of product costing systems: traditional volume-based systems, activity-based costing systems, time-driven activity-based costing systems, and resource consumption accounting. We employ a continuing numerical example to illustrate the commonalities and differences among these systems. In Part 2 of the paper, we evaluate the systems along multiple dimensions and offer suggestions for how we might blend the best features of various approaches.

scholarly journals Influence of Firm-Specific Determinants on the Profitability of Companies in Agri-Food Sector in Bosnia and Herzegovina: Research Project

2021 ◽  
Vol 4 (1) ◽  
pp. 31-38
Author(s):  
Dalila Ivković
Keyword(s):  
Bosnia And Herzegovina ◽  
Food Processing ◽  
Annual Reports ◽  
Food Sector ◽  
Return On Assets ◽  
Business Decisions ◽  
Food Processing Sector ◽  
Specific Factors ◽  
The Impact ◽  
Insight Into

The main objective of the undertaken study is to examine the influence of firm-specific determinants on the profitability of companies in the agri-food sector (agricultural production and food processing) in Bosnia and Herzegovina (B&H). For this purpose, we examine the impact of factors that are considered as determinants of firm profitability such as size, age, liquidity, leverage, and growth. The impact of the specific characteristics of the companies is tested on profitability measured by return on assets (ROA) in the agricultural and food processing sector in B&H. The analysis is based on the collection of quantitative data published in the food financial annual reports of the listed agricultural and processing companies in B&H over a period of five years (2015-2019). A research model with crucial variables with five independent variables (size, age, liquidity, leverage, and growth rate) and one dependent variable (profitability) was developed based on the literature review. The study outcomes will give an insight into the firm-specific factors that are important in examining the profitability of companies in the agri-food sector in B&H. Furthermore, the results of this research will serve as a basis for further studies in which the number of variables observed will be extended. Moreover, the results are expected to be useful for the management of the company to direct business decisions towards improving the company’s profitability.

Product Costing for Decision Making in Certain Variable-Proportion Technologies

2007 ◽  
Vol 19 (1) ◽  
pp. 51-70 ◽  
Author(s):  
Dileep G. Dhavale
Keyword(s):  
Decision Making ◽  
Returns To Scale ◽  
Demand Functions ◽  
Full Cost ◽  
Inappropriate Use ◽  
Product Costing ◽  
Pricing Error ◽  
Fixed Proportion ◽  
Product Costs ◽  
The Relationship

Most methods and techniques in management accounting assume that a production technology consumes inputs in a fixed proportion. This paper develops product-costing measures for pricing and decision-making purposes for homogeneous variable-proportion technologies using first-order conditions and Euler's theorem. The results developed in this paper show that relevant costs under these circumstances are conventional full costs adjusted by a factor that is a function of returns to scale of a variable-proportion technology. In the development of the above results, it is shown that, for any technology, the price of a product is a linear function of its full cost only for a certain type of demand function. For all other demand functions, the relationship between the price and the full cost is nonlinear. The fixed- and the variable-proportion technologies are compared using a Monte Carlo simulation to determine the relative magnitudes of errors in product costs and prices, and differences in profit resulting from inappropriate use of a fixed-proportion model in a variable-proportion technology environment. The simulation results indicate that the costs are about 3 percent higher for fixed-proportion technology over a range of returns to scale values. The pricing error, on the other hand, is significant and varies from 70 percent lower to 50 percent higher compared to the correct prices. Variance analyses of difference in profits under the two technologies indicate that the errors in costing and pricing under fixed-proportion technology result in significantly lower profits.

Decreasing Costs and Optimizing Therapy of Erythropoietic Medications in a Hospital-Based Outpatient Cancer Treatment Center

2005 ◽  
Vol 40 (9) ◽  
pp. 788-795 ◽  
Author(s):  
Deidre B. Clark ◽  
Debbie C. Byrd ◽  
Miranda R. Andrus ◽  
Tom Rogers ◽  
Timothy A. Martin
Keyword(s):  
Cost Analysis ◽  
Cancer Treatment ◽  
Initial Dose ◽  
Cost Effective ◽  
Treatment Center ◽  
Protocol Implementation ◽  
Before And After ◽  
Continued Use ◽  
Cost Calculations ◽  
Protocol Review

The objectives of this study were to decrease the costs associated with erythropoietic medications and to optimize the use of these medications for patients with chemotherapy-induced anemia. Methods A cost-analysis was completed by performing cost calculations which determined that darbepoetin is the most cost-effective erythropoietic medication for one Cancer Treatment Center (CTC). Darbepoetin protocol and order forms were then developed for chemotherapy-induced anemia. The total costs of all erythropoietic medications at the CTC before and after protocol implementation were evaluated via purchasing data. Pre- and post-protocol retrospective chart reviews were completed to determine if protocol implementation resulted in therapy optimization. Results Forty-two patients were included in the pre-protocol review, and 21 patients were included in the post-protocol review. After darbepoetin protocol implementation, the average cost per month of erythropoietic medications decreased by approximately $30,500. The percent of patients receiving an appropriate initial dose doubled post-protocol (pre: 38% vs post: 76%). Appropriate monitoring of hemoglobin at baseline, monthly, and before dose adjustments increased to 100% post-protocol implementation; and there was a 50% increase in the percent of patients who had their hemoglobin monitored appropriately until stable. Conclusions A savings of approximately $335,000 was expected for the year of 2004 with the protocol use and darbepoetin as the erythropoietic agent of choice. The optimization of therapy should continue to improve via continued use of the darbepoetin protocol.

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