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.