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List of forums -> Questions and answers. Help. -> Prime cost expenses bug ?

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Topic:
  

Topic created : 27.04.2010, 17:47
Chamurapi
Twelve years with Virtonomics
 
Hi there,
 
I have several factories, where the prime cost expenses are lower than the raw materials cost.
 
One example:
 

 
How is that possible? As I'm setting my selling price according to prime cost price I'm experiencing loss Not so   

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27.04.2010, 18:24
ChrisBerlin82
Winner of the Leaders Contest in the nomination Quality label Winner of the Leaders Contest in the nomination of Consumer Goods Winner of the Leaders Contest in the nomination Markets Storm Winner of the Leaders Contest in the nomination The Standard of Virtonomics Winner of the Contest for Managers in the nomination Raw Material Base Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination Trade Turnover
Winner of the Contest for Managers in the nomination The Standard of Virtonomics
 
Not all products require 1 raw material for production. For example canned meat requires only 1/5 pcs. of steel and not 1. Thus produce price prime cost < sum(raw material prices). 
 

28.04.2010, 10:10
Chamurapi
Twelve years with Virtonomics
 
well, in this case i buy only 1/5 pcs. so it doesn't matter,
I'm buying exactly that amount of raw I need, so the cost for it should be always lower than prime cost
 
any other ideas? 
 

28.04.2010, 12:54
ChrisBerlin82
Winner of the Leaders Contest in the nomination Quality label Winner of the Leaders Contest in the nomination of Consumer Goods Winner of the Leaders Contest in the nomination Markets Storm Winner of the Leaders Contest in the nomination The Standard of Virtonomics Winner of the Contest for Managers in the nomination Raw Material Base Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination Trade Turnover
Winner of the Contest for Managers in the nomination The Standard of Virtonomics
 
Hmmmm actually this is interesting...
 
The overall expenses (including all variable costs) are 131.055,98 $. Prime cost expenses are 74.917,09$. I would add at least salary, energy costs and raw material costs to the prime cost of a produced good, but these costs already come in at 95.358,00$. I really don't understand what prime costs suppose to be here and how they are calculated. It doesn't really matter what you sum up of the variable and fixed costs you never come out with the displayed prime cost. 
 

29.04.2010, 13:45
deathincarn
 
iv noticed this too. and also cant figure it out 
 

List of forums -> Questions and answers. Help.-> Prime cost expenses bug ?

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