What is the Management Cost of a product?
Management Cost (or Mgmt Cost) is used as a reference for the approximate cost of a product to compare to the true costs used. It can also be used to calculate sales pricing.
The Management Cost for a product can be entered in the Costs section of a product window in the field labeled "Mgmt". This is a reference field that doesn't have any real impact on costing but is instead used to note or compare a particular cost value. Often, it can be used to record a typical or expected cost for a product. Used in that way, a quick comparison can be made with costs on particular transactions or the average cost to see if something may be going wrong with the product's value.
Outside of just being used a specialized note or reference, the Management Cost can also be used to calculate sales pricing. There are two price types that are calculated by adding a percentage or amount to the Management Cost. These might be helpful if you want the price for a product to be based on cost but the fluctuation in the real cost is too erratic. Those price types are:
- S% Mgmt Cost + Percent
- S$ Mgmt Cost + Amount