COSTING
FLEX Costing module helps you calculate and analyze the costs of your products and services. You can set up cost centers,allocate costs, and compare your actual costs with your budget. With this module, you can gain insights into your cost structure and make informed decisions to optimize your profitability.
Pre-Costing
FLEX can help manufacturers estimate the cost of their products more accurately and efficiently. The software can automate many of the calculations involved in pre-costing and provide real-time updates based on changes in the cost of raw materials or other factors. This can help manufacturers make more informed decisions about which products to produce and how to price them your profitability.
#PRE-COSTING
Pre-Cost before an Order
“Pre-cost” typically refers to the estimated or calculated cost associated with a product or service before an order is placed or production begins. This cost is used for budgeting, pricing, and decision-making purposes.
It allows a company to assess the potential expenses and profitability of fulfilling an order or undertaking a project before committing to it. Pre-costing can include various expenses, such as materials, labor, overhead, and other relevant factors. It
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Automatic Overhead calculation
An allocation base is a factor that is used to distribute overhead costs to cost centers or products. Common allocation bases include machine hours, labor hours, or square footage of space used.
Various allocation methods can be used, such as direct allocation, activity-based costing, or predetermined rates. The choice of method depends on the business’s specific needs and the nature of its operations.
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Budget Analysis
Budget analysts scrutinize both revenue and expenditure components of the budget. They assess the sources of revenue, such as taxes, grants, and fees, and examine how these align with financial goals. They also evaluate the planned expenditures, including operating expenses, capital investments, debt service, and any other financial commitments.
Analysts assess the budget’s long-term sustainability. They consider factors such as the ability to cover operating expenses, service debt, and maintain adequate reserves.
Post-Costing
FLEX can help manufacturers calculate their actual costs more accurately and efficiently. The software can automate many of the calculations involved in post-costing and provide real-time updates based on changes in the cost of raw materials or other factors.This can help manufacturers identify cost variances and take corrective action, such as adjusting production processes or negotiating better prices with suppliers
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Post-Cost After every segment of production like set wise Post-Cost
Production is often divided into different segments or sets of activities. For example, in manufacturing, there might be different sets of processes involved, such as material procurement, machining, assembly, and quality control.
Once a specific segment of production is completed, the actual costs associated with that segment are recorded. This includes the actual expenditures on materials, labor hours worked, and any other expenses incurred during that phase.
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BOM (Bill of material) VS Post costing analysis
Post-costing analysis compares the actual costs of production with the budgeted costs. It is conducted after production to evaluate how well the production process adhered to the budget and to identify areas of improvement.
Post-costing analysis involves examining actual expenses, such as materials, labor, and overhead, and comparing them to the budgeted costs for specific production segments or the entire production process.
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Pre-Cost vs Post-Cost Analysis
The primary purpose of pre-cost analysis is to estimate and plan for the costs associated with a future project, production run, or activity. It helps in setting a budget and determining the financial feasibility of the endeavor.
Pre-cost analysis involves making predictions and estimations about the potential costs of materials, labor, overhead, and other expenses before they are actually incurred.