Industrialization has played an essential part in the evolution of humans. As industrialization started, the life and way of living of people wholly changed. It was a new stage in the development of man. But where these industries are making different products that make our lives easier increases expenses if they are a big challenge. Industries generate colossal revenue and play a vital role in other countries’ economies where industrialization is at its peak. Here below, we will discuss those heavy and expensive burdens that the manufacturing industry faces.
The burden of heavy taxes:
Every industry, whether online website content service or others has to carry the burden of different taxes. The rate of tax which industries have to pay is different in other countries. Even at some places or countries, the rate of tax varies with the industry. For instance, the construction industry has different rates of tax than the textile industry.
The same happens with the manufacturing industry. Their tax rates are also different from other industries. Over time, the tax rate on industries increased, and new industries have to pay a considerable amount of money in the form of different taxes, which has become a burden and heavy expense for the industries.
The reason behind why these taxes has become a burden for the industries is that there are few taxes that they have to pay in any condition. For instance, the industry’s production or revenue is low due to any reason, but still, there are some taxes that they have to pay in any condition.
When a situation or event like this happens, the industry has to face some difficulties and troubles. If we talk about the manufacturing industry, they also have to pay vast amounts of tax money. They have to pay income tax. If you are importing your raw material or exporting your product to other countries, you have to pay import or export duty. Another tax that the manufacturing industry has to pay is property tax. And many other taxes. Along with the tax rate, the process of taxation is also different in every country, but no doubt every industry has to carry this burden.
Labor cost:
Whenever we think about any industry, the image created in our minds is of significant and different machines. But these machines alone could not perform all the tasks independently. Labor is a permanent and compulsory element of every industry. Without labor, no enterprise can run and complete its work.
When we came to the manufacturing industry, we found that the labor force is equally essential for this industry. Every industry has certain permanent expenses, from which one is labor expense. Every manufacturing industry has to hire a large number of laborers, and when you hire them, they have to pay them their wages which is a significant heavy expense.
Although low wages of labor in many countries are a big issue, it is still counted as a considerable expense of the manufacturing industry. The wages or salary of labor varies with different countries. But this lower expense is a hidden heavy expense. Because industries hire specific experts, engineers, and highly qualified technicians, these experts charge a sufficient lump sum amount that collectively became a heavy expense for the industry.
Raw material cost:
The process of production and manufacturing cannot start until the industry has its required raw material. Before starting the production of anything or any good in the industry, the first decision is made about the raw material.
Every sector, including the manufacturing industry, has to buy or even, most of the time, import the raw material before starting the manufacturing and production of the product. This natural material could be anything nut, bolt, wires, wood, small motors, lights, or anything or material included in your production process, or the making of the final finished product will be called raw material.
Although the objective behind production with the raw material is to create a coat efficiency in production and minimize material expense, it is still one of the heavy expenses of the manufacturing industry.
Overhead cost:
Overhead costs are those expenses of the industry that the industry made other than labor and raw material. For instance, assets like machinery and tools (such as, straight line skates, hydraulic lift tables, etc,.) are a significant part of the industry.
Because without these types of machinery, the industry could not complete its task or fulfill its purpose of production on a large scale. Without these machines and tools, the industries cannot work correctly and rapidly. So we can say that it is a compulsory part and expense of the manufacturing industry.
They are buying the machines and tools for a drive is one of the most significant expenses. Every industry buys a single piece of machinery for their sector by paying a substantial amount of money. Not only is that maintenance of these types of machinery another expense that comes along with these machines.
Without supervision, these machines could not perform the task efficiently. Day-to-day maintenance and repairing of these assets is a heavy expense. Not only that but maintenance of another thing within the industry is also included in overhead cost expense. For instance, you want new connections or new lighting in your industry or want to rebuild or renovate any area of your sector.
All these tasks need a heavy amount of money which is a significant expense. Precisely, we can say that all those expenses that are not included in labor and material costs of the manufacturing industry are included in overhead costs.
Conclusion:
The manufacturing industry generates significant revenues and profit at the same time, and they have different heavy burdens of expenses that they have to pay.
Even when an industry goes through any crisis, then to fulfill these expenses become a big challenge for the industry. The industry has faced many challenges at that time and has also met much loss.
