Added costs

The added value/costs represent the actual increase of utility from the viewpoint of the customer as a part is transformed from raw materials to finished inventory. The distinction between added and non-added is used to determine the surcharge amount.

For new purchased items:

  • The added costs are the material costs plus surcharges.

For manufactured items:

  • The added costs are the operations costs plus surcharges. Materials (including the item receipt surcharges and warehouse surcharges) are considered as non-added cost.

For items transferred between warehouses:

  • The added costs are the warehouse surcharges.

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