Production cost

Cost and management accounting.

1.

Total production cost is often defined as the total of Prime cost and Production overhead cost.

So defined, Production cost, together with Period cost, comprise total cost.

2.

The term 'production cost' may also be defined more broadly, or more narrowly, than this.

Here as elsewhere, consistency of definition and of calculation are essential to producing meaningful comparable figures.

The only safe approach is set out calculations in a clear manner that colleagues can understand and validate. In an educational assessment context, this means showing your workings.

See also

• Direct costs
• Direct expense
• Direct production cost
• Indirect costs
• Management accounting
• Period costs
• Prime cost
• Production overheads