What is Manufacturing Cost?

Manufacturing cost is the sum of all costs incurred in the Manufacturing of a good or service. It includes the cost of materials, direct labour, and indirect expenses. The cost of goods manufactured (COGM) is the item’s manufacturing cost plus the associated freight, handling, and administrative costs.

The Manufacture of a product involves two types of costs: Direct and Indirect. Direct Costs are those that can be specifically identified with producing a particular product or service. This might include the cost of raw