ABSTRACT
The three basic elements of cost in manufacturing a product are labor, burden, and material. Labor cost is the direct manufacturing people cost, i.e., those who perform operations on the product for which the time is usually recorded and measured in relation to the quantity produced. Burden, also called overhead, is the cost of capital (buildings, tools, and machinery), indirect labor, utilities, taxes, general supplies, and so on. Indirect labor includes such costs as purchasing, personnel, management, quality, industrial engineering, cost engineering, and accounting. Material costs are those that can be measured with respect to the amount used by a product. Those material costs that are very inexpensive or cannot be prorated are included in burden. Material cost may be subdivided into three categories: raw, process, and hardware. For assembled cards a fourth category, components, would be added.
