University of Texas
At Arlington
Managerial Accounting - Standard Cost
Professor: Martin Taylor
Team 5 – Kevin Zheng
December 14th, 2012
0
AGENDA
• Company briefing
• Standard Cost definition and structure
• Material cost and variations
• Labor cost and variations
• Manufacturing overhead and variations
University of Texas At Arlington http://www.uta.edu/
1
Lamex Office Furniture
A division of HNI Corporation
•
Established in 1977. 1 million sq ft manufacturing facility in PRC.
•
Member of HNI Corporation since 2006
•
1,000 members in PRC and Hong Kong
•
Large direct sales force and dealer network in China with $100M revenue in 2012
•
Flagship showrooms in Hong Kong, Tangxia, Shanghai, and Beijing
University of Texas At Arlington http://www.uta.edu/
2
Lamex Products
Desking
Monarch
Majesty
Grande
Tiper
Seating
Pride
Empire
Acuity
Rondo
Icao
Join me
Gradient Fit
Rateo
U2
Systems
Storage
Metal Casegoods
Cabinets
University of Texas At Arlington http://www.uta.edu/
Central Data Storage
Mobile Pedestal
3
Standard Cost Definition
Standard Cost is an estimated or predetermined cost of
performing an operation or producing a good
or service, under normal conditions.
Standard cost includes material cost, labor cost and
manufacturing overhead.
Standard Cost
Material Cost
Labor Cost
SG&A - Selling,
General
and Administrative
Expenses
University
of Texas
At Arlington
http://www.uta.edu/
Overhead
4
Material Cost Setting
In Lamex, material cost is also named BOM cost. It jointly
sets by product engineering, manufacture engineering and
purchasing department.
Product engineering is responsible for BOM structure and Quantity
setting.
Manufacture engineering is responsible for Utilization and/or scrap
Ratio setting.
Purchasing is responsible for material Unit Cost setting.
Material cost = ((BOM Quantity * Utilization Ratio ) * Unit Cost)
University of Texas At Arlington http://www.uta.edu/
5
4013053570
IC2C55-BK-800
8 ......6
1810004360 硬化剂，夹板用
0.027
0 KG
0.027
2.99
2.99
4013053570
IC2C55-BK-800
9 ......6
1810004370 改良剂，夹板用
0.001
0 KG
0.001
3.68
3.68
0
4013053570
IC2C55-BK-800
10 ....4
1020000670 蟹爪,M6X10MM,镀彩锌
30
0 PC
30
0.05
0.05
1.5
4013053570
IC2C55-BK-800
11 ...3
1020001260 钉,1007码钉,4800个/盒
0.03
3.63
3.63
0.11
4013053570
IC2C55-BK-800
12 ...3
3010025030 座组合，艾基奥
1
0
0
10.93
4013053570
IC2C55-BK-800
13 ....4
3010005380 椅用胶水假设BOM的因素
0.007
0 KAN
0.007
0
0
2.84
4013053570
IC2C55-BK-800
14 .....5
1810010650 喷胶,119F
0.202
0 KG
0.202
14.08
14.08
2.84
4013053570
IC2C55-BK-800
15 ....4
3010028570 海绵,座,5060,艾基奥
1
0 PC
1
0
0
8.09
4013053570
IC2C55-BK-800
16 .....5
1100001650 海棉,4060,防火,H1W42L80IN
0.182
0 IN
0.182
44.44
44.44
8.09
4013053570
IC2C55-BK-800
17 ...3
1040008320 布,黑,AT60
0.225
0 M
0.225
1.75
1.75
4013053570
IC2C55-BK-800
18 ...3
1020062531 铁片,艾基奥,黑色
4013053570
SAP
no.
4013053570
IC2C55-BK-800
Model
IC2C55-BK-800
4013053570
IC2C55-BK-800
0 ..2
21
0
4013053570
IC2C55-BK-800
1 ...3
22
0.1
4013053570
IC2C55-BK-800
2 ..2
23
....4
4013053570
IC2C55-BK-800
3 ...3
24
.....5
a
SAP no.
IC2C55-BK-800
4013053570
产品编号IC2C55-BK-800
...3
型号265 .....5
BOM
Qty
IC2C55-BK-800
6 .....5
27
...3
4013053570
4013053570
IC2C55-BK-800
4013053570
IC2C55-BK-800
0 BOX
Seating BOM Cost
b
1
a
1020072810 Description
螺丝,机牙,M6X18MM,十字槽,沉头,黑色,耐落
Component
1040020420 美时标签,黑底白字
...3
Seq. 19 Level
20 ...3
Model
4 ....4
25
..2
0.03
2
BOM Qty
0 PC
b
0 PC
4 Scrap Ratio0 BOM
PC Unit
1
0 PC
d
0.39
e=c*d
2
1.71
1.71
3.42
Bomtotusag
4 Old Unit 0.1 New Unit0.1 New Cost0.4
e
Cost (bas) Cost (bom)
1
0.15
0.15
0.15
4013053570
3010025040 中背椅,有扶手,五星爪脚
扪布组，座，艾基奥
1
0.5
0 PC
1
0.5
0
0
171.68
4.06
4013000350
3010021040 椅子，艾基奥
总布组,椅子用
1
0.5
0 PC
1
0.5
0
0
171.68
4.06
1
0.5
0 PC
1
0.5
0
0
25.27
4.06
1
0.5
0 PC
M
1
0.5
0
8.12
3010024960
3010021020 座组合，定盘机关，艾基奥
布组-800,椅子用
c=a*b
3010036370
1040019340 座板，定盘和摇盘机关用，艾基奥，有蟹爪
布,NW39 BLACK,NEW WIN,C-2637
Seq.
Level
3010025300
3010028930 座板,定盘机关用,无蟹爪,艾基奥
中背背组合,艾基奥,黑架
顺序号
Component
1
0 PC
9
11.12
0 PC
M
BOM层级
零件号
Bomtotusag
Old
Unit
0.296
10
KG
0.05
0
BOX
Scrap
Ratio1810004350
BOM Unit
7 ......6
0.268
0 KG
28
...3
1020071820 胶水,夹板用
螺丝,自攻,4X9.5MM,十字槽,沉头,黑色
6
PC
e
Cost
(bas)
1010001170
THK,550X550MM,荷木
1040005020 木皮,1.5MM
15# 线
3010002850
1020001260 胶水,CASCO木胶水
钉,1007码钉,4800个/盒
单位
总用量
Description
1
0
e=c*d
0
8.12
9.87
4.06
0
8.37
36.25
0.73
0.73
7.3
9
0.01
0.01
0.09
零件描述
New10.001
Unit
0.326
0
0
1.07
0.05
3.63
3.63
0.18
New
Cost
3.68
3.68
0.99
6
0.02
0.02
0.12
Cost0.268
(bom)
0 KG
PC
0.027
4
新单价
2.99
0.09
0 KG
PC
0.001
1
3.68
35.5
3.68
35.5
30
1
0 PC
30
1
0.05
0.97
0.05
0.97
1.5
0.97
0.03
1
3.63
0
3.63
0
0.11
19.92
1
0
18.32
0
18.32
10.93
18.32
0.007
4
0
0.06
0
0.06
2.84
0.24
0.202
4
14.08
0.18
14.08
0.18
2.84
0.72
1
4
0
0.16
0
0.16
8.09
0.64
0 IN
M
0.182
0.547
44.44
15.81
44.44
15.81
8.09
8.65
0.225
1
0 M
PC
0.225
1
1.75
6.92
1.75
6.92
0.39
6.92
1020062531
1030024850 铁片,艾基奥,黑色
脚,五星爪,虎爪形,H-320
2
1
0 PC
2
1
1.71
23.33
1.71
23.33
3.42
23.33
19
40 ...3
..2
1020072810
1020046880 螺丝,机牙,M6X18MM,十字槽,沉头,黑色,耐落
气弹簧，青岛三弘 430S28 旧款:777
4
1
0 PC
4
1
0.1
14.1
0.1
14.1
0.4
14.1
20
41 ...3
..2
1040020420
1030004710 美时标签,黑底白字
轮子,50MM
1
5
0 PC
1
5
0.15
1.01
0.15
1.01
0.15
5.05
IC2C55-BK-800
21
42 ..2
3010025040
3010033760 扪布组，座，艾基奥
扶手组,奥迅
0.5
1
0 PC
0.5
1
0
0
4.06
18.26
IC2C55-BK-800
22
43 ...3
3010021040
1030025170 总布组,椅子用
左扶手,PP,酒杯型
0.5
1
0 PC
0.5
1
0
7.91
0
7.91
4.06
7.91
4013053570
IC2C55-BK-800
23
44 ....4
...3
3010021020
1030025180 布组-800,椅子用
右扶手,PP,酒杯型
0.5
1
0 PC
0.5
1
0
7.91
0
7.91
4.06
7.91
4013053570
IC2C55-BK-800
24
45 .....5
...3
1040019340
BLACK,NEW WIN,C-2637
1020007390 布,NW39
垫圈,ID8.5OD15X1.5MM,镀镍
0.5
6
0 M
PC
0.5
6
8.12
0.02
8.12
0.02
4.06
0.12
4013053570
IC2C55-BK-800
25
46 ..2
...3
3010028930
1020006063 中背背组合,艾基奥,黑架
螺丝,机牙,M6X35,十字,球面垫圈,白锌,耐落
1
6
0 PC
1
6
0
0.2
0
0.2
36.25
1.2
4013053570
IC2C55-BK-800
26
47 ...3
1040005020
线
1020084300 15#
垫圈,ID12.5OD24X3.0MM,镀白锌
9
8
0 M
PC
4013053570
IC2C55-BK-800
27
48 ...3
..2
1020001260
3010043370 钉,1007码钉,4800个/盒
包装组,中背,艾基奥,套餐
4013053570
IC2C55-BK-800
28
49 ...3
1020071820
1070000150 螺丝,自攻,4X9.5MM,十字槽,沉头,黑色
纸箱,92L62W64HCM,A=B
4013053570
IC2C55-BK-800
29
50 ...3
4013053570
IC2C55-BK-800
4013053570
4013053570
1810004360
1020072430 硬化剂，夹板用
螺丝,机牙,M6X13MM,十字槽,沉头,黑色,耐落
0.027
4
旧单价
d
0.001
1
IC2C55-BK-800
BOM数量
4013053570
8 ......6
29
...3
报废率
c=a*b
0.08
4013053570
IC2C55-BK-800
9 ......6
30
...3
1810004370
1020030091 改良剂，夹板用
背架,中背,艾基奥,黑色
4013053570
IC2C55-BK-800
10
31 ....4
..2
1020000670
1030060220 蟹爪,M6X10MM,镀彩锌
新望远镜,三级
4013053570
IC2C55-BK-800
11
32 ...3
..2
1020001260
3010028910 钉,1007码钉,4800个/盒
机关组,倾仰机关,艾基奥
4013053570
IC2C55-BK-800
12
33 ...3
3010025030
1020081110 座组合，艾基奥
机关,新摇盘
4013053570
IC2C55-BK-800
13
34 ....4
...3
3010005380
1030004780 椅用胶水假设BOM的因素
垫圈,ID6.2,OD16,H10MM
0.007
4
0 KAN
PC
4013053570
IC2C55-BK-800
14
35 .....5
...3
1810010650
1020000780 喷胶,119F
螺丝,机牙,M6X30,十字,球面垫圈,白锌,耐落
0.202
4
0 KG
PC
4013053570
IC2C55-BK-800
15
36 ....4
...3
3010028570
1020000770 海绵,座,5060,艾基奥
螺丝,机牙,M6X25,十字,球面垫圈,白锌,耐落
1
4
0 PC
4013053570
IC2C55-BK-800
16
37 .....5
..2
1100001650
1040008380 海棉,4060,防火,H1W42L80IN
网布,Mesh1,艾基奥,黑色,OA-2101
0.182
0.547
4013053570
IC2C55-BK-800
17
38 ...3
..2
1040008320
1020067670 布,黑,AT60
背铁,定盘机关用,艾基奥,黑色,新版
4013053570
IC2C55-BK-800
18
39 ...3
..2
4013053570
IC2C55-BK-800
4013053570
IC2C55-BK-800
4013053570
4013053570
1
0.05
1
0 BOX
PC
0 PC
0 BOX
PC
0.08
0.36
0
35.5
9
8
0.01
0.14
0.01
0.14
0.09
1.12
0.05
1
3.63
0
3.63
0
0.18
8.9
6
0.5
0 PC
6
0.5
0.02
12.61
0.02
12.61
0.12
6.31
1020072430
1070003560 螺丝,机牙,M6X13MM,十字槽,沉头,黑色,耐落
纸卡,B=B,110X55CM
4
1
0 PC
4
1
0.09
1.52
0.09
1.52
0.36
1.52
30
51 ...3
1020030091
1990041410 背架,中背,艾基奥,黑色
PO 光身风琴连卷袋0.02X114.3X152.4CM
1
0 PC
1
35.5
1
35.5
1
35.5
1
IC2C55-BK-800
31
52 ..2
...3
1030060220
1030000080 新望远镜,三级
封箱胶纸,45码*60MM
1
0.05
0 PC
RL
1
0.05
0.97
1.45
0.97
1.45
0.97
0.07
IC2C55-BK-800
32 ..2
3010028910 机关组,倾仰机关,艾基奥
1
0 PC
1
0
0
19.92
1
0 PC
1
18.32
18.32
618.32
4
0 PC
4
0.06
0.06
0.24
University
of Texas At
Arlington1020081110
http://www.uta.edu/
IC2C55-BK-800
33 ...3
机关,新摇盘
4013053570
4013053570
0.03
1
2.99
0.09
新成本
IC2C55-BK-800
34 ...3
1030004780 垫圈,ID6.2,OD16,H10MM
Utilization/Scrap Ratio
• Using the historic finance data to calculate the scrap
ratio. Such as painting materials.
• Using the computer-aided-manufacturing software to
simulate the utilization ratio of particle board. Such as
Haomai Cut Plan.
Size:
4’x 8’
6’x 8’
• Using the production pilot run to calculate the actual
utilization ratio for fabric and leather.
University of Texas At Arlington http://www.uta.edu/
7
Unit Cost
Rules:
– All unit cost should at least have 3 quotations.
– All quotations should base on same specifications and quality.
– Lowest cost should be used through negotiation, online auction,
etc.
– Unit of the cost is essential for calculation.
– If dual-source or multiple-source strategy is applied, the highest
cost of qualified supplier is used.
University of Texas At Arlington http://www.uta.edu/
8
Material Cost Variations
• VAVE – Value Analysis and Value Engineering
– BOM structure change
– Alternative material
– Quantity change
• PPV – Purchase Price Variance
– Negotiation (cost reduction or cost adder)
– Supplier changes
– Long Term Agreement (LTA)
• Manufacture Productivity
–
–
–
–
Manufacture process change
Utilization improvement
Scrap improvement
Scheduling and expedite cost
University of Texas At Arlington http://www.uta.edu/
9
Labor Cost
Labor Cost is a wage is remuneration paid by an employer
to an employee (only direct workers). It may be a calculated
as a fixed task based amount, or at an hourly rate, or based
on an easily measured quantity of work done. It is
contrasted with salaried work, which is based on a fixed time
period.
In Lamex, Labor Cost is calculated by Cost-Standard-Hour
(CSH) and Hourly Wage by manufacture engineering and
human resource department.
Labor Cost = CSH * Hourly Wage
University of Texas At Arlington http://www.uta.edu/
10
Cost Standard Hour - CSH
SAP No.
物料描述
4010409980 矮背椅,连扶手,五星爪脚
产品型号
1712W-300
工序组
工序组描述
60100033 1712W-000，1712W-000 矮背椅,有扶手,五星爪脚
工序 工作中心 工作中心描述 工时类型 人工用时(分钟)
10 SEAT-001 压板
L-S001
7
4010409980 矮背椅,连扶手,五星爪脚
1712W-300
60100033 1712W-000，1712W-000 矮背椅,有扶手,五星爪脚
20 SEAT-002 裁/车
L-SEAT
4010409980 矮背椅,连扶手,五星爪脚
1712W-300
60100033 1712W-000，1712W-000 矮背椅,有扶手,五星爪脚
30 SEAT-003 开棉
L-SEAT
6
4010409980 矮背椅,连扶手,五星爪脚
1712W-300
60100033 1712W-000，1712W-000 矮背椅,有扶手,五星爪脚
40 SEAT-010 25/26/BR
L-SEAT
48
4019100020 矮背椅,无扶手,铝爪,瑞姿
RGR-LMA-S0P-100
60100048 RGR-LMA-S0P-100，矮背椅,无扶手,铝爪,瑞姿
20 SEAT-009 EDDY&MANTIS
L-SEAT
30
4019100030 矮背椅,无扶手,铝爪,瑞姿
RGR-LMA-S0P-300
4019100030 矮背椅,无扶手,铝爪,瑞姿
RGR-LMA-S0P-300
60100048 RGR-LMA-S0P-100，矮背椅,无扶手,铝爪,瑞姿
20 SEAT-009 EDDY&MANTIS
L-SEAT
30
4019100240 矮背椅,2D扶手,黑胶爪,瑞姿
RGR-LMA-S2B-300
60100048 RGR-LMA-S2P-100，矮背椅,2D扶手,铝爪,瑞姿
10 SEAT-002 裁/车
4019100240 矮背椅,2D扶手,黑胶爪,瑞姿
RGR-LMA-S2B-300
60100048 RGR-LMA-S2P-100，矮背椅,2D扶手,铝爪,瑞姿
4019100250 矮背椅,2D扶手,黑胶爪,瑞姿
RGR-LMA-S2B-600
Part/Model Name:
Process:
60100048 RGR-LMA-S2P-100，矮背椅,2D扶手,铝爪,瑞姿
10Operator:
SEAT-002 裁/车
4019100250 矮背椅,2D扶手,黑胶爪,瑞姿
RGR-LMA-S2B-600
Part/Model Number:
Plant/Dept.:
60100048 RGR-LMA-S2P-100，矮背椅,2D扶手,铝爪,瑞姿
Time:
Date:
20TAKT
SEAT-009
EDDY&MANTIS
L-SEAT
4019100560 矮背椅,薄咭臣背,无扶手,黑胶爪,瑞姿
RGR-LUA-S0B-900
60100048 RGR-LUA-S0P-100，矮背椅,薄咭臣背,无扶手,铝爪,瑞姿
No.
Elemental Description
Break Point
1
10 4SEAT-002
裁/车
5
6
7
L-SEAT
Best Repeatable
10
4019100560 矮背椅,薄咭臣背,无扶手,黑胶爪,瑞姿
RGR-LUA-S0B-900
60100048 RGR-LUA-S0P-100，矮背椅,薄咭臣背,无扶手,铝爪,瑞姿
20 SEAT-003 开棉
L-SEAT
4019100560 矮背椅,薄咭臣背,无扶手,黑胶爪,瑞姿
RGR-LUA-S0B-900
60100048 RGR-LUA-S0P-100，矮背椅,薄咭臣背,无扶手,铝爪,瑞姿
30 SEAT-009 EDDY&MANTIS
L-SEAT
-
50
4019100570 矮背椅,薄咭臣背,无扶手,黑胶爪,瑞姿
RGR-LUA-S0B-980
60100048 RGR-LUA-S0P-100，矮背椅,薄咭臣背,无扶手,铝爪,瑞姿
10 SEAT-002 裁/车
L-SEAT
-
54
4019100570 矮背椅,薄咭臣背,无扶手,黑胶爪,瑞姿
RGR-LUA-S0B-980
60100048 RGR-LUA-S0P-100，矮背椅,薄咭臣背,无扶手,铝爪,瑞姿
20 SEAT-003 开棉
L-SEAT
-
4019100570 矮背椅,薄咭臣背,无扶手,黑胶爪,瑞姿
RGR-LUA-S0B-980
60100048 RGR-LUA-S0P-100，矮背椅,薄咭臣背,无扶手,铝爪,瑞姿
30 SEAT-009 EDDY&MANTIS
L-SEAT
4019100910 中背椅,无扶手,铝爪,瑞姿
RGR-MMA-S0P-900
60100048 RGR-MMA-S0P-100，中背椅,无扶手,铝爪,瑞姿
10 SEAT-002 裁/车
L-SEAT
4019100910 中背椅,无扶手,铝爪,瑞姿
RGR-MMA-S0P-900
60100048 RGR-MMA-S0P-100，中背椅,无扶手,铝爪,瑞姿
20 SEAT-009 EDDY&MANTIS
L-SEAT
4019100920 中背椅,无扶手,铝爪,瑞姿
RGR-MMA-S0P-980
60100048 RGR-MMA-S0P-100，中背椅,无扶手,铝爪,瑞姿
10 SEAT-002 裁/车
L-SEAT
-
41
4019100920 中背椅,无扶手,铝爪,瑞姿
RGR-MMA-S0P-980
60100048 RGR-MMA-S0P-100，中背椅,无扶手,铝爪,瑞姿
20 SEAT-009 EDDY&MANTIS
L-SEAT
-
32
4019101430 中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
RGR-MUA-S2P-300
60100048 RGR-MUA-S2P-100，中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
10 SEAT-002 裁/车
L-SEAT
-
61
4019101430 中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
RGR-MUA-S2P-300
60100048 RGR-MUA-S2P-100，中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
20 SEAT-003 开棉
L-SEAT
-
4019101430 中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
RGR-MUA-S2P-300
60100048 RGR-MUA-S2P-100，中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
30 SEAT-009 EDDY&MANTIS
L-SEAT
4019101440 中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
RGR-MUA-S2P-600
60100048 RGR-MUA-S2P-100，中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
10 SEAT-002 裁/车
L-SEAT
4019101440 中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
RGR-MUA-S2P-600
60100048 RGR-MUA-S2P-100，中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
20 SEAT-003 开棉
L-SEAT
4019101440 中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
RGR-MUA-S2P-600
60100048 RGR-MUA-S2P-100，中背椅,薄咭臣背,2D扶手,铝爪,瑞姿
30 SEAT-009 EDDY&MANTIS
L-SEAT
-
0
0
6
4019100020 矮背椅,无扶手,铝爪,瑞姿
RGR-LMA-S0P-100，矮背椅,无扶手,铝爪,瑞姿
10 SEAT-002 裁/车
L-SEAT
38
工序组
工序组描述 RGR-LMA-S0P-100
工序
工作中心
工序 60100048
工作中心
工作中心描述 工时类型
人工用时(分钟)
Group
Description
Process60100048
Work
Center Description
RGR-LMA-S0P-100，矮背椅,无扶手,铝爪,瑞姿
Time Observation Form
Sum of Elemental Times (Overall Cycle Time):
CSH Type
ProcessL-SEAT
Time (minutes)38
10 SEAT-002 裁/车
L-SEAT
HNI Corporation
Return to Toolbox
RapidL-SEAT
Continuous Improvement
20 SEAT-009 EDDY&MANTIS
0
2
0
3
0
0
0
0
0
38
32
Observed by:L-SEAT
8
0
9
0
38
32
54
Time
3
3
50
-
41
-
32
3
58
-
61
-
3
58
1. Sum each column and circle the best REPEATABLE Time that does not include abnormal values or missed readings.
2. Enter this time in the Best Overall Cy cle Time box.
Rapid Continuous Improvement
3. For each element, select the lowest common time as the Component Task Time, enter in appropriate column.
4. Sum the Component Task Time column. This sum MUST equal the Best Repeatable Overall Cy cle Time.
5. If not, begin by adjusting the larger Component Task Times to achieve requirements of Step #3.
Best Repeatable
Overall Cycle
Time
6. The adjusted component task times can now be used in conjunction with the other "Tools of RCI".
University of Texas At Arlington http://www.uta.edu/
11
Hourly Wage
Workers’ Wage:
Base pay
Performance based incentive and bonus
Medical insurance 医疗保险
Pension insurance 养老保险
Unemployment insurance 失业保险
Work injury insurance 工伤保险
Maternity insurance 生育保险
Housing provident fund 住房公积金
Average Wage is 130%~150% to the base pay
University of Texas At Arlington http://www.uta.edu/
12
Labor Cost Variations
• Labor cost changes
– Labor inflations
– Government policies
– Human market demand and supply driven
• Labor productivities
–
–
–
–
–
–
Employee skill improvements
Employee performance
Manufacture process changes (non-value added eliminations)
Automation
Technology improvements
Headcount reductions
University of Texas At Arlington http://www.uta.edu/
13
Manufacturing Overhead
Manufacturing overhead costs (MOH cost) are all
manufacturing costs that are related to the cost object
(work in process and then finished goods) but cannot be
traced to that cost object in an economically feasible way.
Examples include supplies, indirect materials (MRO) such
as lubricants, indirect manufacturing labor such as plant
maintenance, cleaning, quality and warehouse labor, plant
rent, plant insurance, property taxes on the plant and plant
depreciation.
MRO - Maintenance,
& Operations
University
of Texas AtRepair
Arlington
http://www.uta.edu/
14
Manufacturing Overhead
In Lamex, manufacturing overhead is calculated as:
Overhead = (Material Cost + Labor Cost) / (1 – X%)
X% defined as:
Desking:
Seating:
Systems:
Storage:
Trading:
University of Texas At Arlington http://www.uta.edu/
X1%
X2%
X3%
X4%
X5%
In-house
Out source
15
Standard Cost Management
• Monthly P/L review for exceptional management
• Quarterly management review for better cost control
• Annual finance reset to reflect the actual cost
• Set process KPIs (Key-Performance-Indexes) to
measure the cost management performance in monthly
basis, including BOM accuracy%, VAVE$, PPV$,
Productivity%, etc.
• Manufacture cost committee is assigned to manage the
cost performance
University of Texas At Arlington http://www.uta.edu/
16