Product Costing

The cornerstone of financial analysis for any manufacturer is calculating an accurate product cost. While the components of product cost may seem simple at first, for complex and process manufacturers this analysis can become unwieldy. ImpactECS calculates accurate and actionable product costs based on your company’s business and manufacturing processes.


There are two basic buckets of costs – standards and actuals. Determining whether to calculate one or both costs depends on the company’s strategic approach to making operational decisions.

Standard costs provide a road map to understanding the material, labor and overhead costs associated with manufacturing a product. They are developed using historical data and are set as a basis for budgeting and comparison.

Actual costs are calculated with the goal of understanding the specific costs associated with the product. Computing actuals and comparing them to a standard to generate a variance is one method to determine whether a product is performing well.

To maintain an effective product costing practice, robust or complex manufacturing companies need capabilities to:

  • Maintain multiple versions of costs (standard, actual, frozen, practical, etc.) with an unlimited number of cost categories
  • Allocate overhead to products using attributes defined at the product level
  • Calculate a unique cost for each way a product is manufactured or sourced
  • Blend costs for specific products, categories, families or groups produced in multiple locations with different manufacturing specifications

ImpactECS Capabilities

ImpactECS’ functionality is rooted in its ability to calculate detailed and actionable product costs. Using a client-defined methodology, ImpactECS is a platform where finance, accounting and operations teams can build cost models with the flexibility of spreadsheet modeling but the sophistication of an enterprise system.

  • Calculate detailed standard and/or actual costs for each SKU produced based on your specific manufacturing or business processes
  • Maintain multiple product cost models simultaneously using different methodologies
  • Manage bill-of-materials (BOMs) and recipes and maintain cost detail through parent-child product relationships
  • Maintain multiple BOMs and account for substitutions that could drive a different product cost
  • Compute accrued cost at each WIP step throughout the manufacturing process
  • Calculate dynamic blended costs using percentages, volumes or other drivers to assign values to inventory
  • Improve speed of closing process to allow costing professionals to focus more time on data analysis
  • Integrate all cost data and calculation logic in central location to ensure data consistency throughout the organization
  • Create sub-models that can cost activities outside product manufacturing (i.e. energy, pulp)



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SAP and ImpactECS for Manufacturers: Cost
Management and Profitability Analysis Solutions
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