When the manufacturer does this occasional little soul search, the most important thing is to consider which parts, products, customers, projects, and / or workplaces are profitable. To this end, Activity-Based Costing (ABC) serves to identify, share, and report manufacturing operations. To a greater extent, ABC is a more cost-effective system than standard costing because it can identify locations where manufacturing processes can be made more effective, essentially by defining the "real cost" of product production. Workstation workstations are specially designed for ABC, as they can generate identifiable and measurable output units. With ABC, management can determine processes, determine cost drivers for these processes, and determine the unit cost of products that are related to performance-based budgets that determine the cost-effectiveness of a job.
Cost Center Costs Determination (19459002) Cost Centric (19459003) Treatment Concept, Work Centers Cost Centers Where Costs Are Analyzed Why It Occurs . For this purpose, the costs are defined according to the advanced type changing overhead product where costs typically per unit (material, labor, labor benefit and other variables) are equal; and a general premium where the total cost is more predictable (machines, lease payments, utilities, etc.) but the cost per unit depends on the purpose or standard of the volume. Setting up workstations or setting standard clocks is very important for pricing purposes and will affect how much business you earn. If you set the default volume to too low (for example, say 500 hours a year, only 1/8 of the 2-hour, 5-day weekly hourly capacity), your price may be too high to win most jobs. In most cases, a smarter business is based on the fixed cost to a level you want to achieve for example 3000 hours a year (1 sh shift). For example, at a work center, a fixed cost of $ 40,000 per hour increases the cost of one part per hour to 500 hours, as opposed to a standard annual $ 13,000.
The volume of volumes (19459006) that you have to produce versus the actual volume (19459006) must be answered by manufacturers to determine inferior line effects The most advantageous scenario is that the shop is burdened with production so that all of the total cost is completely absorbed in the production process. Indeed, profit margins are improved if the overhead costs are too absorbed in production and outweigh the normal output power In short, workpieces per work center will become a positive factor if they produce direct (19459002) added value (19459003) and an indirect base or absorption per year at work centers and cost centers, thus making the cost centers of manufacturers in fact become all important value centers
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