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Cost Structure Analysis

Our Cost Structure System Of Survey's, Analysis and Management Reviews Assures our Customer We Have Programs To Reduce Per Unit Cost for Each Product We Produce.

The Xmultiple Cost Structure system includes the expenses which Xmultiple must take into account when manufacturing our products and the expenses for services we provide. Included in our cost structure system are types of costs include transaction costs, sunk costs, marginal costs and fixed costs. In any cost system are the cost structure is the ratio of fixed costs to variable costs.

Cost structures are simply the identification of how costs associated with the production of a good or service are distributed throughout the process. While some think of a cost structure as referring only to the finances utilized in the production process, a true cost structure will also take into consideration the use of all types of resources along the way. This can include costs such as labor and utilities, as well as back end costs like sales and marketing expenses. This is how Xmultiple's cost structure system works to include all cost.

When attempting to create a reasonable picture of the cost structure associated with the production of connectors and components and services, the first step is to understand each individual step that occurs. This begins with the development of the idea for the product, the acquisition of raw materials, and the creation of production facilities that are used to create the end product. At the same time, our cost structure system addresses all labor costs associated with each step. This includes not only the expense of wages and salaries, but also ancillary benefits offered to employees, such as vacation, retirement, and health benefits. Essentially, any expense that is incurred to ensure all the necessary components for production are in place are part of the Xmultiple cost structures system.

However, the components of an effective cost structure do not end when the good or service is produced. There are still the matters of storage, marketing and sales, and the conveyance of the product to the consumer. This means that the cost structure must also include warehousing costs incurred while the product awaits sale, all costs associated with marketing and selling the product, and the transportation and transaction costs that are incurred while delivering the product to a buyer.

Analyzing all these factors as part of determining the current cost structure yield two important benefits for Xmultiple factory facilities. First, the current condition of the cost structure aids in helping to determine the unit price for each product Xmultiple produces. Obviously, the unit cost must exceed the actual expense of producing the product, or the company will soon be out of business. Second, evaluating the expenses that make up the cost structure help identify points along the process that can be refined for greater efficiency, or at least a more responsible use of the resources on hand. This aspect impacts the final unit cost, and assist Xmultiple's management to properly set our profit margins on each unit produced so it benefits our customers with the lowest possible pricing. By having a detailed cost structure system, Xmultiple can work to reduce these cost on an ongoing basis to assure our pricing is at the lowest levels possible for all products we manufactured.

To define a cost structure, Xmultiple defines every cost incurred in relation to a cost object. The following bullet points highlight key elements of the cost structures of Xmultiple's costs:

Product cost structure

Fixed costs. Direct labor, manufacturing overhead
Variable costs. Direct materials, commissions, production supplies, piece rate wages.

Manufacturing Cost Structure In Dollars


Productivity-Adjusted Compensation Rates In Our China and Taiwan Factories


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