Cost of Goods Sold or Manufactured

What is involved in the cost of goods sold or manufactured?

• Direct Labor
• Indirect Labor
• Cost of Materials
• Cost of Storing Materials
• Overhead Costs like
• Electricity
• Gas
• Water
• Telephones
• Office Supplies
• Building Maintenance
• Maintenance Supplies
• Equipment Purchases
• Quality Control
• Training

Two areas of which you may not be aware are Quality Control and Training...

Training

1. Employees must be training on company policies and procedures including safety standards and sexual harassment.
2. Employees must also be trained in how to operate any machines they are using and how to maintain and repair those machines.
3. Employees must be trained in simple math in order to make the calculation that are part of machine operations.(Because these employees did not learn algebra I and II in high school, the industry must do what the school systems did not do)
4. Statistical Process Control classes need to be taught to employees so that quality products can be made with reliability.

Quality Control

According to government regulations, all companies are required to make sure that they produce a quality product that is ultimately sold to the general public.  Ralph Nader was originally responsible back in the 1960s for this happening.

Without quality control, the public has no guarantees that what they are buying is actually reliable and works the way it is supposed to work.

If a company is 99.9% accurate, it is still producing 1500 out of spec parts per million.

How many of those out of spec parts would you like to have in the automobile you are riding in or the washing machine you are using?

Those 1500 parts have to be found and pulled out of production so that they are not inadvertantly sold.

SO...  if the high schools do not do their jobs with teaching students, then that burden and cost falls on industries and companies...  which causes them to increase their prices...

AND...  if our federal government imposes rules and regulations on our industries and companies for whatever reason, then that costs money which is then passed on to the consumer.

DON'T FORGET...  when employees demand more money, those increased costs are passed along to the consumer as well...

If a company pays an employee $50,000 a year, it ultimately costs that company $150,000 in benefits which include insurance, retirement, holidays, vacation and sick leave.

AWARENESS IS KNOWLEDGE

KNOWLEDGE IS POWER

On the Horizon

WHAT DOES INFLATION MEAN? 

Inflation is the decline of purchasing power of a given currency over time. A quantitative estimate of the rate at which the decline in purchasing power occurs can be reflected in the increase of an average price level of a basket of selected goods and services in an economy over some period of time.

WHAT CAUSES INFLATION?
Inflation is a measure of the rate of rising prices of goods and services in an economy. Inflation can occur when prices rise due to increases in production costs, such as raw materials and wages. A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product.

IS INFLATION GOOD OR BAD?
Inflation erodes purchasing power or how much of something can be purchased with currency. Because inflation erodes the value of cash, it encourages consumers to spend and stock up on items that are slower to lose value. It lowers the cost of borrowing and reduces unemployment.

For the most part, inflation is not good unless wages increase proportionately...  but, if that happens, then economics say that there is no inflation...  just a steady economic growth which is a win/win situation for everyone.

But, if prices increase and wages do not, then people pay more for the goods and services they have to have and do not partake in the goods and services that they do not really need...  This causes the economy not to grow.

From my perspective as a retired individual, I don't give a rat's ass if the economy grows or not as long as prices do not increase...  And, yes that is a selfish point-of-view but I would suspect most people do not want prices to go up and if anyone wants their taxes to go up needs to take their head out of their ass or purchase an inflated price glass bellybutton so that they can see better.