I've an argument with my marketing staff regarding product costing to determine selling price. Product X consist of product A & B where produce under same manufacturing department with product X. I've calculate the production cost of product A & B including packaging cost &15% markup to cover administration cost. The issue are:-
1) Packaging material only use to keep product A & B in the warehouse. After Product A & B being use to produce Product X it will reuse back to keep Product A & B for next Product X production. Should I consider to exclude this cost
2) I've include 15% mark up into Product A & B costing. Does this mean that my costing have been double counted the administration cost? The cost of Product X also include 15% markup.