ECONOMICS

Detailed explanation-1: -To qualify as a production cost, an expense must be directly connected to generating revenue for the company. Total product costs can be determined by adding together the total direct materials and labor costs as well as the total manufacturing overhead costs.

Detailed explanation-2: -Multiply the payroll day rate by the amount of time you estimate you’ll need to complete the job. If you’ll rely on subcontractors for work your company doesn’t complete itself, factor those costs into your total labor costs for the job. It can help to get an estimate from each of these contractors.

Detailed explanation-3: -In economics, the cost of production is defined as the expenditures incurred to obtain the factors of production such as labor, land, and capital, that are needed in the production process of a product.