Product Costing

Knowing the cost of producing a product or service is essential to any business.
This knowledge can become critical if faced with competitive pricing or with
opportunities for new business based on meeting price requirements. It can also
be a way of reviewing and analyzing if costs can be reduced in any way toward
the goal of greater profits.

To estimate the cost of production for each item or category of items, there are
these major cost categories:

• Labor
• Material
• Outsource
• Royalties/License Fees
• Safety Procedures
• Shipment
• Indirect/Overhead

For some businesses, a target maximum is established for labor costs as a
percentage of billing price. There are typically two methods of billing the more
costly materials. This also holds true for outsourced and safety procedures and
shipment. One is to incorporate these into a flat rate and another is to bill these
as a separate item based on the quantity/units used. If included in a flat rate,
the cost should be included in the product costing calculations.

Default rates can be established for labor hours, safety procedures, and
shipment, but provision has been made for overrides.

The ideal tool for product costing allows for experimentation, similar to the
capability found in spreadsheets. Entry or editing of a field drives recalculation of
all the other fields. Results are available both from the screen and in
printed reports.

Sample product costings have been included. These can be viewed from the
screen and transferred to a new product costing as a starting point.

SYSTEM REQUIREMENTS:
To install and use Product Costing, the following computer hardware and
software requirements must be met:

Mainstreet Instance of the Database Server accessible locally or from the network.

Processor
600-megahertz (MHz) Pentium III-compatible or faster processor; 1-gigahertz
(GHz) or faster processor recommended

Framework
The .NET Framework 2.0 from Microsoft is required and provided by setup.

Operating System(one of the following)

• Windows XP with Service Pack 2 or later
• Windows Server 2003 Standard, Enterprise, or Datacenter editions with Service Pack 1 or later
• Windows Server 2003 Web Edition SP1
• Windows Small Business Server 2003 with Service Pack 1 or later
• Vista Home Basic and above
• Windows 7

Memory
512 megabytes (MB) or more

Hard Disk
Approximately 500 MB of available hard-disk space is recommended for
installation.

Other Devices
Microsoft Mouse or compatible pointing device

Other Requirements
Microsoft Internet Explorer 6.0 SP1 or later