Product Costing Methods in Dubai: A Guide for Businesses | Ghalib Consulting

Product Costing Methods in Dubai: A Guide for Businesses | Ghalib Consulting

Accurate product costing is essential for businesses in Dubai to maintain profitability, set competitive prices, and make informed financial decisions. Whether you’re in manufacturing, retail, or services, understanding different costing methods can help optimize expenses and maximize margins.

At Ghalib Consulting, we specialize in costing strategies tailored for Dubai’s dynamic market. This guide explores the key types of product costing and how they can benefit your business.

https://images.unsplash.com/photo-1556740738-b6a63e27c4df?ixlib=rb-1.2.1&auto=format&fit=crop&w=1200&q=80
Image: Choosing the right costing method can significantly impact profitability.

1. Job Costing

What It Is:

• Tracks costs for specific projects or custom orders (e.g., construction, consulting, bespoke manufacturing).

Best For:

✔ Customized products/services
✔ Small-batch production
✔ Dubai’s growing construction and contracting sector

https://images.unsplash.com/photo-1581093450021-4a7360e9a9e5?ixlib=rb-1.2.1&auto=format&fit=crop&w=1200&q=80
Image: Job costing helps track expenses per project.

2. Process Costing

What It Is:

• Averages costs across mass-produced identical items (e.g., FMCG, chemicals, food processing).

Best For:

✔ Large-scale manufacturing
✔ Businesses with standardized products
✔ Dubai’s industrial and food production sectors

3. Activity-Based Costing (ABC)

What It Is:

• Allocates overhead costs based on activities driving expenses (e.g., labor hours, machine usage).

Best For:

✔ Complex production processes
✔ Companies with high indirect costs
✔ Dubai’s tech and logistics industries

https://images.unsplash.com/photo-1460925895917-afdab827c52f?ixlib=rb-1.2.1&auto=format&fit=crop&w=1200&q=80
Image: ABC costing provides precise overhead allocation.

4. Standard Costing

What It Is:

• Uses predetermined costs for materials, labor, and overhead, with variances analyzed later.

Best For:

✔ Budgeting and performance tracking
✔ Manufacturing firms in Dubai’s free zones

5. Marginal Costing (Variable Costing)

What It Is:

• Focuses only on variable costs (raw materials, direct labor) to assess per-unit profitability.

Best For:

✔ Short-term pricing decisions
✔ Startups and SMEs in Dubai

Why Accurate Costing Matters in Dubai?

✅ Competitive Pricing – Avoid under/overpricing in a crowded market.
✅ Profit Maximization – Identify and cut unnecessary expenses.
✅ Investor Confidence – Clear cost structures attract funding.

How Ghalib Consulting Can Help

We offer:
🔹 Costing Model Design
🔹 Overhead Optimization
🔹 Pricing Strategy Advisory

📞 Contact Us Today:
📧 ghalib@ghalibconsulting.com | 📞 *+966-50-7024644*