Total Cost of Manufacturing

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on April 13, 2023

The total cost of manufacturing a product has three elements, namely:

  • Direct labor (or direct wages)

A manufacturing business maintains separate raw materials purchase accounts for each type of raw material that its factory uses.

Similarly, it maintains separate ledger accounts for direct wages and various production-related expenses.

A trial balance extracted from the ledger of a manufacturing business is, therefore, capable of supplying the figures needed to calculate the value of each cost element.

Total Cost of Manufacturing FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.