Cost of Production

Take the uncertainty out of your decisions by calculating your cost of production.
Why calculate your cost of production?

Knowing your cost of production is a powerful management tool. Watch a short video to see how cost of production can help bring confidence and clarity to your management decisions.

How is cost of production different from other records you keep?

View our quick guide of understanding financial records.

Ready to dig into the basics?

Start with the Financial Terms course to begin laying the foundation.

Laying the Foundation: Financial Terms
  • Review key financial terms around costs, breakeven, and cost of production
  • Key differences among financial documents and how to use them
  • Test yourself on financial terms
Cost of Production Basics: How to Calculate
  • Review the difference between cash and accrual accounting
  • Explore the four steps to calculating cost of production
  • Practice calculating cost of production and breakeven
Try it Out: Do the Math
  • Find out which records are relevant for calculating cost of production
  • Sort through and classify records needed for cost of production
  • Walk through a sample calculation and try your hand at doing the math
Try it Out: Make Decisions
  • Analyze an operation to find red flags and opportunities
  • Make recommendations based on cost of production
  • Use cost of production to make decisions about when to sell or whether you can afford a purchase

Cost of Production Related Content

The Business of Agriculture

How Managerial Accounting Can Help You Manage Your Farm or Ranch

Accrual-based managerial accounting offers a solution for those who want a deeper understanding of their operation and the financial insights.

The Business of Agriculture

Why You Need a Cashflow Budget

Discover what a cashflow budget says about your operation.

The Business of Agriculture

Five Tips for Calculating Your Breakeven Point

Routine financial management is essential to the long-term sustainability of every farm, but making marketing decisions unique to your operation isn’t always so simple.


Your financial officer is a great resource to help you calculate your cost of production. Contact your local office for a consultation.