Material Cost

1. Material cost is the cost to buy the raw material needed for production. For example, in clothing production, the raw material needed is fabric, button and thread.

2. The cost of used raw materials can be calculated using the following formula:

The following is the steps of calculating raw materials cost in production.

3. Cost of raw material is cost changed. When production increases, the cost of materials increases and when production decreases, material costs will also decrease.