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sir i am now working with a copany which is producing welding arc electrodes & welding arc wire.I need a excel formate of costing of those aforesaide products.Please attached file also as soon as possible.I shall be thankful..........
Sanjib Kumar pal.

From India, Saharanpur
Dear Sanjib,

This is in addition to what Anil Kumar Arora has said.

You should have mentioned your designation, purpose of this query, is your company into production of welding electrodes etc.

Costing is job of your ICWA. While deciding the product cost, following factors are considered:

a) Fixed Cost. It includes interest on capital, interest on fixed assets, rental of the premises etc.

b) Variable cost. It includes set up cost, labour charges, operational expenses, maintenance charges, scrap generated etc.

c) The third factor is inventory carrying charges. This is for raw material or inventory of finished goods

d) Lastly, your admin overhead.

In depth analysis of the costing is done when companies take "Make Vs Buy" decision. For higher volume it makes sense to do production in-house. However, for lower volume it is better to outsource the production. Now how much is higher and how much is lower, that decision can be done only with example. The decision will vary from one industry to another, one company to another and lastly one product to another.


Dinesh V Divekar

From India, Bangalore
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