It can be unsettling when calculating selling price and finding that happy-medium for maximum profit. By tracking all costs related to your products; ERPAG logically does a brilliant job by pulling your data together pricing your end product competently.
The customization and quality reporting daily, weekly, monthly, and annual views for that cost data you’re after. ─ Finished products, sub-assemblies, raw materials, overhead, etc., and for quick checks on your business health at a higher level, ERPAG wind’s-up costs and sales price information to demonstrate how profit is changing over time.
The system will also calculate your revenue based on your estimated cost and selling price. You can track your sales, purchasing, manufacturing, and create custom reports to filter & dissect what’s going on in your business and at what particular time of the year it is most successful!
Allowing correct selling prices for your products, ERPAG uses your Bill of Materials to automatically calculate assembly and labor costs.
Even though you have a Manufacturing Project/Work Order generated from the SO, you will still be able to change the selling price.
We also set that the selling price is formed by ‘Markup/Margin’. The selling price is automatically calculated based on the estimated cost. Further, you can use this generated product in Sales Orders, Work orders, handled like all other regular items. Once you save it, ERPAG will automatically recalculate! Also if the selling price is set to ‘margin/markup’ – it will calculate cost automatically as well.
Based on the average purchase price of your input materials, our system will automatically give an estimated cost, that way you are able to set a price on that product.
Costing & Pricing is Simply Greater with streamlined ERP software
Most businesses do well at concluding their cost of goods for simple products. Although, when product becomes more heightened with its raw material inputs, commodity price fluctuations, supply changes, or costing can be a challenge. If you don’t understand your products’ accurate costs, then you’ll find it difficult to price them competitively. Which will lead to deterioration profit margins or lost business.
What is selling price?
The selling price of a product or service is the Final price. If you don’t make a profit while in the market, your business unfortunately won’t last. It’s important to know how to calculate selling price.
Correctly calculating a selling price of a product is a win-win for you and the customer. If done right — they benefit from the deal, and you receive fair profit.
Cost Price Vs. Selling Price
- Selling Price: The amount the 3rd party sells the item to their customers.
- Cost Price: The price 3rd party sellers pay and incur for purchasing items from a manufacturer.
Manufacturing Cost Formula and Example is as follows:
MC = Raw Materials + Direct Labor + Allocated Manufacturing Overhead
A Complete Set of Cost Data
ERPAG combines all the components of a product’s cost into one location. Factual information to do with the cost of labor, material, overhead, and other cost elements. You can view, make adjustments and report on expenditure/cost. That way for a compounded product, we can define the cost for both production making items, and purchasing items.
If an item is already available, then it is cost based on the stock valuation procedure which is selected in ERPAG (Warehouse lists) i.e FIFO, Weighted Average.
In fast-changing market conditions, you can amend your stock costing so that you don’t validate your stock in an unrealistic manner.
For component parts (raw materials, assemblies, sub-assemblies,) of a completed product, you need to be able to understand at all times, your costs for each.
By using ERPAG you will be able to break down views of your final product into its component parts and gain insights into your profitability on a customer-by-customer basis.
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