Costing your Products and services

What costs should I consider in determining how much to charge for my products or services?

Every component of a service or product has a different, specific cost. Many small firms fail to analyze each component of their commodity's total cost, and therefore fail to price profitably. Once this analysis is done, prices can be set to maximize profits and eliminate any unprofitable service. Cost components include material, labor and overhead costs.

Material Costs are the costs of all materials found in the final product.

Labor Costs are the costs of the work that goes into the manufacturing of a product. The direct labor costs are derived by multiplying the cost of labor per hour by the number of personnel-hours needed to complete the job. Remember to use not only the hourly wage but also the dollar value of fringe benefits. These include social security, workers' compensation, unemployment compensation, insurance, retirement benefits, etc.

Overhead Costs are any costs not readily identifiable with a particular product. These costs include indirect materials, such as supplies, heat and light, depreciation, taxes, rent, advertising, transportation and insurance. Overhead costs also cover indirect labor costs, such as clerical, legal and janitorial services. Be sure to include shipping, handling and/or storage as well as other cost components.

Part of the overhead costs must be allocated to each service performed or product produced. The overhead rate can be expressed as a percentage or an hourly rate. It is important to adjust your overhead costs annually. Charges must be revised to reflect inflation and higher benefit rates. It's best to project the costs semiannually, including increased executive salaries and other projected costs.

For information on how UHY Dawgen can assist you in setting up your operation in Jamaica contact us. UHY Dawgen operates from 4 strategic locations in Jamaica.There are five easy ways to contact us. Simply call, email, fax, write or just stop by.

Head Office - Kingston

Unit 34, Winchester Business Centre, 15 Hope Road,

Kingston 10, Jamaica, West Indies

Telephone:876-9084007/7542074/ 9064827

 (International No.USA) 937-7-DAWGEN(937-7329436)

Fax:7540380 Email:info@dawgen.com

BRANCHES

§  Montego Bay,St. James

Shop EU6, Whitter Village, Ironshore, St. James

Telephone: 876-876-9533793/953-8486 Fax: 953-3058/7540380

Email:infobranch@dawgen.com

§  Ocho Rios, St.Ann

Shop C1, 101Main Street, Ocho Rios, St.Ann

Telephone: 974-5373/9748772 Fax: 754-0380  Email:infobranch@dawgen.com   

§  Mandeville, Manchester

 Shop L1 & K1,Grove Court Plaza, 16 Park Crescent, Mandeville, Manchester

Telephone: 962-6369 Fax: 754-0380  Email:infobranch@dawgen.com

UHY Dawgen is a member of UHY, an international association of independent accounting and consulting firms, whose organising body is Urbach Hacker Young International Limited, a UK company. Each member of UHY is a separate and independent firm. The services described herein are provided by UHY Dawgen and not by Urbach Hacker Young International Limited or any other member of UHY.  Neither Urbach Hacker Young International Limited nor any member of UHY has any liability for services provided by other members