Upload
kristina-mcdowell
View
224
Download
0
Tags:
Embed Size (px)
Citation preview
Dimensioning & Tolerances 2
Manufacturing Costs BreakdownBREAKDOWN
Manufacturing Cost Analysis 3
Importance Your company wants to make money!
Profit and price (and ultimately your salary) depend on how you manage manufacturing costs.
You will have to address costs and economics in presentations about your work
Manufacturing Cost Analysis 3
Overview
Non-Manufacturing Costs
Manufacturing Costs
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Direct Materials Definition: Any material that is a part of the finished product that significantly adds to the weight or volume of the item
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Direct Materials Definition: Any material that is a part of the finished product that significantly adds to the weight or volume of the item Examples:
◦ Wood used to make furniture
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Direct Materials Definition: Any material that is a part of the finished product that significantly adds to the weight or volume of the item Examples:
◦ Wood used to make furniture◦ Plastic used to make a Frisbee
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Direct Materials Definition: Any material that is a part of the finished product that significantly adds to the weight or volume of the item Examples:
◦ Wood used to make furniture◦ Plastic used to make a Frisbee◦ Material used to make the soles of shoes
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Materials Definition: Material that does not significantly add weight or volume to the product, or that is used for something indirectly related to the product.
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Materials Definition: Material that does not significantly add weight or volume to the product, or that is used for something indirectly related to the product. Examples:
◦ Glue
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Materials Definition: Material that does not significantly add weight or volume to the product, or that is used for something indirectly related to the product. Examples:
◦ Glue◦ Screws
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Materials Definition: Material that does not significantly add weight or volume to the product, or that is used for something indirectly related to the product. Examples:
◦ Glue◦ Screws◦ Cleaning materials
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Materials Definition: Material that does not significantly add weight or volume to the product, or that is used for something indirectly related to the product. Examples:
◦ Glue◦ Screws◦ Cleaning materials◦ Lubricants
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Materials Definition: Material that does not significantly add weight or volume to the product, or that is used for something indirectly related to the product.
Examples:◦ Glue◦ Screws◦ Cleaning materials◦ Lubricants◦ Shelves used to store paint, tools, or other items
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Direct Labor Definition: Any labor done directly on the product that affects the physical properties of the item
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Direct Labor Definition: Any labor done directly on the product that affects the physical properties of the item Examples:
◦ Putting together furniture
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Direct Labor Definition: Any labor done directly on the product that affects the physical properties of the item Examples:
◦ Putting together furniture ◦ Cutting chocolate bars into special shapes
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Direct Labor Definition: Any labor done directly on the product that affects the physical properties of the item Examples:
◦ Putting together furniture ◦ Cutting chocolate bars into special shapes◦ Painting bicycle frames
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Direct Labor Definition: Any labor done directly on the product that affects the physical properties of the item Examples:
◦ Putting together furniture ◦ Cutting chocolate bars into special shapes◦ Painting bicycle frames◦ Injection molding plastic smartphone cases
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Labor Definition: Labor important to production that is not performed directly on the item being produced.
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Labor Definition: Labor important to production that is not performed directly on the item being produced. Examples:
◦ Materials purchasing
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Labor Definition: Labor important to production that is not performed directly on the item being produced. Examples:
◦ Materials purchasing◦ Quality control
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Labor Definition: Labor important to production that is not performed directly on the item being produced. Examples:
◦ Materials purchasing◦ Quality control◦ Janitorial labor
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Labor Definition: Labor important to production that is not performed directly on the item being produced. Examples:
◦ Materials purchasing◦ Quality control◦ Janitorial labor◦ Production management
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Indirect Labor Definition: Labor important to production that is not performed directly on the item being produced. Examples:
◦ Materials purchasing◦ Quality control◦ Janitorial labor◦ Production management◦ Tech support
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Manufacturing Overhead Definition: Total of all indirect costs that are required in order to manufacture a product.
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Manufacturing Overhead Definition: Total of all indirect costs that are required in order to manufacture a product. Examples of included costs:
◦ Indirect Materials
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Manufacturing Overhead Definition: Total of all indirect costs that are required in order to manufacture a product. Examples of included costs:
◦ Indirect Materials◦ Indirect Labor
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Manufacturing Overhead Definition: Total of all indirect costs that are required in order to manufacture a product. Examples of included costs:
◦ Indirect Materials◦ Indirect Labor◦ Depreciation of machinery and property values
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Manufacturing Overhead Definition: Total of all indirect costs that are required in order to manufacture a product. Examples of included costs:
◦ Indirect Materials◦ Indirect Labor◦ Depreciation of machinery and property values◦ Manufacturing plant property taxes
Manufacturing Cost Analysis 3
Review
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Homework Problem (MC 3) Give a definition for each cost classification below. Also give 2 examples for each.◦ A) Direct Labor◦ B) Direct Materials◦ C) Indirect Labor◦ D) Indirect Materials◦ E) Manufacturing Overhead
Manufacturing Cost Analysis 3
Dimensioning & Tolerances 2
Sources: Direct / Indirect Materials
◦ http://www.microbuspub.com/pdfs/chapter4.pdf◦ http://en.wikipedia.org/wiki/Direct_materials_cost◦ http://www.accountingtools.com/questions-and-answers/what-are-indirect-materials.html
Direct / Indirect Labor◦ http://www.microbuspub.com/pdfs/chapter4.pdf◦ http://www.accountingtools.com/definition-direct-labor◦ http://www.accountingtools.com/definition-indirect-labor
Manufacturing Overhead◦ http://www.microbuspub.com/pdfs/chapter4.pdf◦ http://www.accountingcoach.com/manufacturing-overhead/explanation◦ http://www.accountingtools.com/questions-and-answers/what-is-manufacturing-overhead.html
Images◦ http://www.freeimages.com
Manufacturing Cost Analysis 3