7 reasons for Cost Changes
You will need to indicate your reason(s) for changing costs when completing the cost change Excel file. See the table below for the Reason Type, Definition, and Example
| Change Reason Type | Definition | Example |
| Raw Materials | Commodities used to produce the final good(s) | pork, wheat, milk, corn |
| Production Costs | Direct manufacturing costs | labor, equipment |
| Packaging | Inner packaging materials (consumer facing) | pouch for cheese powder and retail box for Macaroni & Cheese |
| Cartons | Outer packaging (for shipping or distribution of product) |
corrugate cardboard for cases, shrink wrap for pallet-stacked cases |
| Overhead | Indirect plant & production costs | marketing materials, insurance, facility upkeep |
| Warehouse & Transport | All costs to deliver finished goods to GFI | 3rd party warehousing, 3rd party trucking services |
| Other | Costs not covered in the above categories |
How to indicate the "Percent Change"
Each cost change should be supported by at least one reason (above).
If the full amount of the cost change is due to one reason, you should enter 100 under that column. For example, if I am raising the cost of my cheese solely because milk prices increased, I would complete the columns like this:
| Raw Materials | Raw Materials Description |
| 100 | milk prices |
If my cost increase is due to multiple factors, you should indicate what percent of the increase is due to each reason. Make sure to include the description of each reason. These percentages do not have to be split evenly between each reason. Please assign the actual weight to the reason for the cost change.
For example, if I am raising the cost of my cheese because I've increased employee wages and milk prices have gone up, I would complete the columns like this:
| Raw Materials | Raw Materials Description | Production Costs | Production Costs Description |
| 75 | milk prices | 25 | labor wage increase |
If you have multiple cost change reasons, ensure that the numbers entered in each row add up to 100.
Reminder: The cost change reasons, and percentages assigned to them, do not have to be the same for each item. Each row on your Excel file (each item) must have the following:
- At least one cost change reason indicated
- Total 100 across all indicated reasons indicated