Assumptions in calculating manufacturing costs?


#1

Hello world

Many parameters influence the estimation of Cost of Goods Sold (COGS) in a hardware startup. By COGS, I mean the technical-related costs to produce and ship a product to a customer. As you know, some can be easily calculated, like the Bill of Materials (BoM), while others can only be assumed initially (as % of BOM probably), like the profit margin and the overheads of the manufacturer, the scrap rate, the expenses on testing and validating the unit, the certification costs, duties, freight and shipping costs.

Does anyone know what are the important assumptions someone needs to consider when calculating the COGS, and what shall we expect to pay at each?

Thank you all very much in advance! :slight_smile:

PS. I am excluding sales related costs, retailers, cost of customer acquisition etc. My main interest is the technical part.