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Direct Material Costs Cost of Goods Sold 41110 3 {{{keywords}}} {{{description}}}
CO111
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| − | {{this}} measures the expense a company incurred to acquire sellable products (buy products) or acquire materials, ingredients, services to manufacture sellable products (make products). It includes the original purchase price of the raw materials as well as the costs of transportation, customs, duties, taxes, insurance, currency conversion and payment fees to move the materials to the receiving facility. Compare to [[Link::TLC|Total Landed Cost]]. | + | {{this}} measures the expense a company incurred to acquire sellable products (buy products) or acquire materials, ingredients, services to manufacture sellable products (make products). It includes the original purchase price of the raw materials as well as the costs of transportation, customs, duties, taxes, insurance, currency conversion and payment fees to move the materials to the receiving facility. Compare to [[Link::t:TLC|Total Landed Cost]]. |
===Calculation=== | ===Calculation=== | ||
{{math|{{this}}|{{frac|Material Purchase Cost + Material Transportation Cost + Other Direct Material Costs|Revenue|100 %}}}} | {{math|{{this}}|{{frac|Material Purchase Cost + Material Transportation Cost + Other Direct Material Costs|Revenue|100 %}}}} | ||
Revision as of 23:26, 19 August 2020
Direct Material Costs measures the expense a company incurred to acquire sellable products (buy products) or acquire materials, ingredients, services to manufacture sellable products (make products). It includes the original purchase price of the raw materials as well as the costs of transportation, customs, duties, taxes, insurance, currency conversion and payment fees to move the materials to the receiving facility. Compare to TLC.
Calculation
| Direct Material Costs | ||||
| = |
| |||
where
- Material Purchase Cost = Total annual price paid for goods or services purchased
- Material Transportation Cost = Total annual inbound transportation cost
- Other Direct Material Costs = Sum of total annual costs for Material Customs, Duties, Taxes & Tariffs Cost, Acquisition Labor Cost, Acquisition Automation Cost, Acquisition Property, Plant & Equipment Cost and Acquisition GRC, Inventory & Overhead Cost
- Total Revenue = Total annual revenue from sales of products and services
Unit of measure: %
Importance
A lower number of days indicate better control of the costs to source and make sellable products/services.
Alternative names include: Raw Materials Landed Cost.
Notes
Discuss Contract Custom Solution
Community Importance Rating: Process(es)
| ID | Name | Level | x |
|---|---|---|---|
| P203 | Calculate Sourcing Plan | 3 | P203 |
| S102 | Receive | 3 | S102 |
| S10201 | Schedule Appointment | 4 | S10201 |
| S10202 | Check-In | 4 | S10202 |
| S10203 | Queue Activities | 4 | S10203 |
| S10204 | Inspect Vehicle | 4 | S10204 |
| S10205 | Weigh-In | 4 | S10205 |
| S103 | Unload | 3 | S103 |
| S104 | Inspect | 3 | S104 |
| S201 | Create Order | 3 | S201 |
| S203 | Receive | 3 | S203 |
| S204 | Unload | 3 | S204 |
| S205 | Inspect | 3 | S205 |
| S302 | Negotiate & Award | 3 | S302 |
| S303 | Create Order | 3 | S303 |
| S304 | Receive | 3 | S304 |
| S305 | Unload | 3 | S305 |
| S306 | Inspect | 3 | S306 |
| M302 | Complete Order Engineering | 3 | M302 |
| M405 | Issue Material | 3 | M405 |
| M410 | Transfer | 3 | M410 |
| D203 | Route & Schedule Order | 3 | D203 |
| D304 | Schedule Project Resources | 3 | D304 |