In order to determine the price of a product we first have to know how much it costs. In other words we need to find out the production costs. Besides this, we will also need to know the investment prices. Now we will explain how to calculate the cost of 1400 liters monthly of mango ice cream, to determine the venting cost of the product.
Investment costs
The initial investment can be divided into general preoperative expenses (cost of employment training, tests, previous studies…) and active expenses (machinery and tools).
Production costs
Production costs are the expenses that have to be made month-by-month. They can be classified as variable expenses and steady expenses.
- Variable costs. The magnitude depends on the volume of monthly production (in this case, prime material costs and ingredients). To calculate the quantity that you will need to prepare 1400 liters monthly of mango ice cream, multiple the necessary quantity for one liter times 1400 liters. Then, to calculate the price of the amount required for 1400 liters, we will multiply the last result times the unitary price of each ingredient.
- Fixed prices. The next cost that you will need to calculate is the manual labor, which we consider a steady cost. Other steady costs are the administration costs, which independent from the volume of production. In these expenses are included rent, energy, transportation and others. But first you will need to consider that implements their value as they are used. Because of this, you will need to include the depreciation costs.
To calculate the costs of depreciation you will need to divide the price of each machine between its life span.
This means that you will need to take a certain amount of cash out every month from the monthly income to put back into the machinery for when it breaks down or deteriorates.
Once you are aware of the depreciation costs, you will be able to calculate the total administrative costs.
This way by adding the manual labor costs with the administrative costs, you will obtain your fixed costs.
To sum it up, to obtain the operative costs for the production of 1400 liters of ice cream, add the variable and fixed prices together.
Desserts Recipes General classification of ice creams Ingredients, equipment and materials Elaboration process of fruit ice cream General process of elaboration of fruit ice cream Process of Popsicle elaboration Hygiene in fabrication and manipulation Costs and price determining Determining Pricing Site Map
