<P> Conversion costs cover any costs that are involved when processing raw materials to a finished product, such as manufacturing, utilities and maintenance costs . </P> <P> The costs involved with logistics can be further divided into sub-categories, which mainly regard custom clearance, transportation, warehousing and distribution . Each sub-determinant is influenced by different factors, that is, for instance, the costs for custom clearance depend on the respective importing country's customs policies . </P> <P> Subcontract costs involve all the expenses connected to subcontracting, that is, the outsourcing of contract obligations to a third party . Subcontract costs are generally treated as direct costs to the business . </P> <P> Overhead is an ongoing business expense which cannot directly be allocated to a particular cost unit, which is why they belong to the so - called hidden costs . Despite not directly creating profits, they do still contribute to the ongoing business activities . Overhead can, for instance, be in the form of company cars . Buying a company car and maintaining it is a business expense, which is not profitable as such . However, a company car is seen as an asset and employees can use the car to go to meetings or to run errands, so that the company car eventually turns out to be a good investment . Another example of overhead expenses is budget dedicated for travel entertainment . These expenses do not create direct profit but are still vital to the business . </P>

How cost analysis of any product is done