Post on 16-Oct-2021
1
Collaborative Supply ChainsWe are a company dedicated to helping organizations transition to
Data Driven, Transparent, Cost Models
Basic Of Costing (Products & Services – Direct & Indirect)
Esti
mat
ed T
ime
-2
0 M
inu
tes
# o
f Sl
ides
-2
7
Content
• Goals
• Basics of Cost
• Understanding Cost of Product & Services (Direct & Indirect)
• Basic of Cost Calculations of Product & Services (Direct &
Indirect)
• Basic of Cost Visibility for Better Cost Management of Product &
Services (Direct & Indirect)
Goals
• Have clarity on basics of costing (Manufacturing &
Services, Direct & Indirect)
• Understand various cost elements of a component &
Services.
• Understanding the basic costing Formula
• Understanding how to use the costing formula in
Materials, Use of Labor & Equipment, SG&A + Profit
• The end goal is to increase the Roush’s revenue and
improve profit or margins.
Process Cost
Material Cost
Materials SG&A + Profit
SG&A & PROFIT
Basics of Cost (In Manufacturing & Services)
4
Direct Material
Purchased Parts
Out Sourced Services
Direct Labor
Equipment Burden
Packaging
Cost – $Amount$ used to manufacture a Part (OR Amount Paid to Buy a Part)
SG&A (Executives, Finance,
Legal, Advertising, Sales Etc.)
Profit/Margin
4
Direct Labor- Wages- Benefits (Health Care, Vacation,
Holiday Pat, Federal Taxes Etc.)
5Laser Cutting Bending – Press BrakeRaw Material Storage
MANUFACTURING PLANT
OFFICE
Fork Lifter
Machine Operator
Machine Operator
Sales & Mkt
Air Compressor
Finance & Accounts
Executive
Corporate SG&A – All associated Cost + Material Cost- Material Cost- Freight- Unloading- Storage
Fork Lifts
Plant Mgt OfficeMaintenance Inspection Office
PurchasingEngineeringResearch and Development
Understanding Manufacturing Cost
Process (Equipment Burden )- Equip Depreciation (F)- Direct Consumables (V)- Shared Electricity & Gas (V)- Indirect Labor (V)- Shared Maintenance (F)- Shared Inspection (F)- Indirect Equipment (F)- Tooling Etc. (V)- Plant Mgt Team (F)- Rent/Building (F)- Property Tax (F)- Building Maintenance (F)F – Fixed, V – Variable Cost
Labor + Burden Cost- Burden For Vehicle- Burden For Tool Crib &
Tools- Electrician Hourly Rate- Home Office
Material Cost- Gas Cost- Filter Cost
Understanding Services Cost (Indirect)Example Of Indirect Service Type – Airconditioning Servicing Scope of Work – General Servicing, Gas Top-up & Replacement of Filters
Minimum Show Up Cost – $150
95 $/Hrs.
SG&A + PROFIT (Included in Hourly Rate)
MATERIALS(Mostly Purchased Items)
LABOR + BURDEN(Included in Hourly Rate)
SG&A + Profit- Included in the Labor &
Burden Hourly Rate- Markup on Materials
HOURLY RATE 95 $/Hrs
=
+
+
Basics of Cost Calculation (Manufacturing)
BASIC COST FORMULA Cost = Rate x Usage
Rate - $/Lbs., $/Pcs, $/Hrs. $/Day, $/Km etc.Examples - 5 $/Lbs. of Steel, 0.2 $/Pcs of Nut, 17 $/Hrs. of Labor Rate
Usage - #of Lbs., #of Inches, #of SqFt., # of Sec. Etc. Examples - 5 Lbs of Paint, 10 Inch of Laser Cutting, 3 SqFt of Finishing
• This Formula applies to any costing ( Manufacturing, Services, Indirect, Direct Etc.)• This applies anywhere ( A Hotel Rent, Purchase of Gasoline, A Rental Car, Bulk
Purchases, High Volume Purchases, Single Piece Purchases Etc.)
Steel Sheet – Rate 0.5 $/Lbs. Usage – 2.5 Lbs. Cost = 0.5*2.5 = $1.25
Laser Cut – Rate 1 Sec/Inch & 100 $/Hr Usage – 120 Inch Cost = 1*120/3600*100 = $3.33
Painting – Rate 20 Sec/Sqft & 200 $/Hr Usage – 2 Sqft Cost = 20*2/3600*200 = $2.22
Purchased Bolt – Rate 0.20 $/Pcs Usage – 2 Pcs Cost = 0.20*2 = $0.40
Mat
eri
als
Pro
cess
SG&
A +
Pro
fit
SG&A + Profit – Rate 20% Usage – $30 (Mfg. Cost) Cost = 20/100*30 = $6.00
Basics of Cost Calculation Examples (Manufacturing)
Cost = Rate x Usage
Basics of Cost Calculation (Indirect Services)
BASIC COST FORMULA $ = Rate x Usage
Rate - $/Hrs. $/PcsExamples - 75 $/Hrs. of Electrician Rate, 100 $/Hrs. of Plumber Rate, $100 for
Filter
Usage - # of Hours, # of Pieces (Filters)Examples - 3.5 Hrs. of Electrician Time, 10 Hrs. of Plumber Time, 5 # of
Filters
What Includes in $/Hrs.Cost For Process – (Labor Hourly Cost & Overhead Cost for Vehicle, Tools Etc.SGA & Profit – Applies on Material, Labor & Burden
Basic Of Cost Visibility (For Benchmarking & Negotiation)
Price
Based Benchmarking
Cost
Based Benchmarking
Rate & Usage
Based Benchmarking
Mo
re O
pp
ort
un
ity
Less
Op
po
rtu
nit
y
Commodity Manager: Date:
Roush Part Numbers : Customer/Program:
Description: SOP:
Roush Business Unit: Program Length (years):
CCR #:
RFQ DUE DATE:
Additional QCR's: List out applicable…. Service Requirements Yes
PPAP: Yes Required PPAP: None Feasibility Study Yes *See Tab 2
ITAR: No Conflict Minerals: Yes Packaging Questionnaire: Yes *See Tab 3
USA Material: No Material Cert: Yes Capacity Analysis: Yes *See Tab 4
USA Mfg.: No Process Certs: Yes Freight: Yes *If yes, please include freight in quote.
Inspection Reports: No Welding Docs: Yes Warranty:
NDT Test Reports: No First Article: No
PPAP Due Date PPAP Qty:
Supplier Name: Shipping Location:
Contact: Manufacturing Location:
Supplier Annual Sales: Manufacturing Method:
Tooling Lead Time: Production Lead Time:
PPAP/FAI Lead Time:
Part NumberAnnual
Volume
Raw Material
Cost
Purchased
Material Cost
Labor /
Burden
PKG
*TAB 4* MOQ
Freight (per part)
2345677 500 $ 6.0000 $ - $ 13.7000
Tooling By Part Number
Part Number
Name: Date
Inquiry #
Request for Quote
2345677
Sama
Rammy
3 Million
6 Week
Raw Material Type
Additional Requirements
All of the requested criteria on this RFQ form must be provided within this form and submitted to the buyer by the
due date above.
Always review the Guideline & Assumptions and Program Specific Requirements (if applicable) before completing the RFQ.
Review/fill out attached Purchase Order Addendums (if applicable)
Felcon Darlington
Quality Requirements Roush Quality Capability Requirements
SG&A/
Profit
Purchased
Material Type
Quote Based on Net 60 Payment Terms
Tool Description Tool Cost Timing (weeks)
Supplier Assumptions
If no-quoting, please provide
explaination:
All quote information provided by Supplier is subject to ROUSH's review, and may be accepted or challenged. By signing above and submitting its quote to ROUSH, Supplier represents it (a) has thoroughly
examined and become familiar with the Product(s)/Work covered under the RFQ, which are subject to the Roush Purchase Order General Terms and Conditions and Purchase Order Addendum(s), if applicable,
and (b) is capable of performing the quality of work required to achieve the stated Product(s)/Work objective identified in the RFQ.
Total
Piece
Price
$ 22.2000 Steel $ 2.5000
11
Basic Of Cost Visibility - Supplier Filled Roush RFQ (Direct)
Commodity Manager: Date:
Roush Part Numbers : Customer/Program:
Description: SOP:
Roush Business Unit: Program Length (years):
CCR #:
RFQ DUE DATE:
Additional QCR's: List out applicable…. Service Requirements Yes
PPAP: Yes Required PPAP: None Feasibility Study Yes *See Tab 2
ITAR: No Conflict Minerals: Yes Packaging Questionnaire: Yes *See Tab 3
USA Material: No Material Cert: Yes Capacity Analysis: Yes *See Tab 4
USA Mfg.: No Process Certs: Yes Freight: Yes *If yes, please include freight in quote.
Inspection Reports: No Welding Docs: Yes Warranty:
NDT Test Reports: No First Article: No
PPAP Due Date PPAP Qty:
Supplier Name: Shipping Location:
Contact: Manufacturing Location:
Supplier Annual Sales: Manufacturing Method:
Tooling Lead Time: Production Lead Time:
PPAP/FAI Lead Time:
Part NumberAnnual
Volume
Raw Material
Cost
Purchased
Material Cost
Labor /
Burden
PKG
*TAB 4* MOQ
Freight (per part)
2345677 500 $ 4.0000 $ - $ 15.3300
Tooling By Part Number
Part Number
Name: Date
Inquiry #
Request for Quote
2345677
Aaron
Amit
5 Million
6 Week
Raw Material Type
Additional Requirements
All of the requested criteria on this RFQ form must be provided within this form and submitted to the buyer by the
due date above.
Always review the Guideline & Assumptions and Program Specific Requirements (if applicable) before completing the RFQ.
Review/fill out attached Purchase Order Addendums (if applicable)
ADR Industries Fenton
Quality Requirements Roush Quality Capability Requirements
SG&A/
Profit
Purchased
Material Type
Quote Based on Net 60 Payment Terms
Tool Description Tool Cost Timing (weeks)
Supplier Assumptions
If no-quoting, please provide
explaination:
All quote information provided by Supplier is subject to ROUSH's review, and may be accepted or challenged. By signing above and submitting its quote to ROUSH, Supplier represents it (a) has thoroughly
examined and become familiar with the Product(s)/Work covered under the RFQ, which are subject to the Roush Purchase Order General Terms and Conditions and Purchase Order Addendum(s), if applicable,
and (b) is capable of performing the quality of work required to achieve the stated Product(s)/Work objective identified in the RFQ.
Total
Piece
Price
$ 20.2300 Steel $ 0.9000
Part NumberAnnual
Volume
Raw Material
Cost
Purchased
Material Cost
Labor /
Burden
PKG
*TAB 4* MOQ
Freight (per part)
2345677 500 $ 4.0000 $ - $ 15.3300
Raw Material Type SG&A/
Profit
Purchased
Material Type
Total
Piece
Price
$ 20.2300 Steel $ 0.9000
Part NumberAnnual
Volume
Raw Material
Cost
Purchased
Material Cost
Labor /
Burden
PKG
*TAB 4* MOQ
Freight (per part)
2345677 500 $ 6.0000 $ - $ 13.7000
Raw Material Type SG&A/
Profit
Purchased
Material Type
Total
Piece
Price
$ 22.2000 Steel $ 2.5000
ADR Industries Quote Falcon Quote
Basics of Cost Visibility (Manufacturing) 1/3
Final Price Based Benchmarking & Negotiation
In above scenario two quotes from different supplier shows price based opportunity on one of thesupplier. Typically here we would select ADR Industries for the business as their price is lowest.Assuming quality, delivery & payment terms are identical for both potential suppliers.
ADR Industries Falcon ADR Industries Falcon
Material 4.00$ 6.00$ 4.00$ 4.00$
Process Cost 15.33$ 13.70$ 13.70$ 13.70$
Profit 0.90$ 2.50$ 0.90$ 2.50$
Totals 20.23$ 22.20$ 18.60$ 20.20$
Cost Based Benchmarking
Basics of Cost Visibility (Manufacturing) 2/3
Cost Based Benchmarking & Negotiation
If we are able to get the cost breakdown (at cost level) then we can perform benchmarking & apply thesame to both supplier to identify additional opportunity as show in the above table and graph.Accordingly we can have supplier ADR Industries to further lower the price from $20.23 to &18.60.Therefore visibility in cost leads to better management and negotiation
$2
0.2
0
$1
8.6
0
ADR Industries Falcon ADR Industries Falcon
Material 4.00$ 6.00$ 4.00$ 4.00$
Process Cost 15.33$ 13.70$ 10.96$ 10.96$
Profit 0.90$ 2.50$ 0.90$ 2.50$
Totals 20.23$ 22.20$ 15.86$ 17.46$
Process Cost Drivers ADR Industries Falcon ADR Industries Falcon
Laser Cut Length 265 265 265 265
Laser Cutting Speed Inch/Min 50 40 50 50
Laser Burden Rate 149.00$ 98.10$ 98.10$ 98.10$
Labor Rate 26.50$ 26.00$ 26.00$ 26.00$
# of Operator 1 1 1 1
Process Cost 15.50$ 13.70$ 10.96$ 10.96$
Rate Benchmarking
Rate Based Benchmarking
Basics of Cost Visibility (Manufacturing) 3/3
Rate Based Benchmarking & Negotiation
If we are able to get morebreakdown (at RATElevel) then we canperform benchmarking atrate level to identifyadditional opportunity asshow in the tables andgraph.Accordingly we see nowthat ADR INDUSTRIESwill be lowest on cost$15.86. Thereforedetailed visibility in ratesand cost drivers leads tobetter opportunity.
VISIBILITY ON COSTLEADS TO BETTERCOST MANAGEMENT& NEGOTIATION.
$1
5.8
6
$1
7.4
6
Proposed RFQ Template for Indirect Services Current State – Roush has nostandard RFQ (with CostBreakdown Section) for supplierswho are providing INDIRECTservices & parts.
Snap shot is the proposed DRAFTof RFQ template for INDIRECTservices.
We can have Commodity specificRFQ (with Cost Breakdown Section)for better cost visibility to supportbetter cost management &negotiation
ROUSH Indirect Purchased & Service Items • Consumable Tooling, • Construction Services,• Packaging• Janitorial Services• Security Systems Etc.
Commodity Manager: Date:
Roush Part Numbers : Customer/Program:
Description: SOP:
Roush Business Unit: Program Length (years):
CCR #:
RFQ DUE DATE:
Additional QCR's: List out applicable…. Service Requirements Yes
PPAP: Yes Required PPAP: None Feasibility Study Yes *See Tab 2
ITAR: No Conflict Minerals: Yes Packaging Questionnaire: Yes *See Tab 3
USA Material: No Material Cert: Yes Capacity Analysis: Yes *See Tab 4
USA Mfg.: No Process Certs: Yes Freight: Yes *If yes, please include freight in quote.
Inspection Reports: No Welding Docs: Yes Warranty:
NDT Test Reports: No First Article: No
PPAP Due Date PPAP Qty:
Supplier Name: Shipping Location:
Contact: Manufacturing Location:
Supplier Annual Sales: Manufacturing Method:
Tooling Lead Time: Production Lead Time:
PPAP/FAI Lead Time:
Part/Job Work Detail Quantity Total Hours
Minimum
Show Up
Cost
Plumbing Project 1 1 160.00 $ 150.00
Plumbing Project 2 1 60.00
Plumbing Project 3 1 30.00
Name: Date
Totals $ 60,500.00
Andy
0.9 Million
Purchased Material
Type
Filters & AC Gas
Purchased Material
Cost
$ 28,000.00
Hourly
Rate
$ 130.00
Labor + Overhead
Total Price
$ 48,800.00
Notes
Materials
Inquiry #
Request for Quote
Additional Requirements
All of the requested criteria on this RFQ form must be provided within this form and submitted to the buyer by the
due date above.
Always review the Guideline & Assumptions and Program Specific Requirements (if applicable) before completing the RFQ.
Review/fill out attached Purchase Order Addendums (if applicable)
JK Sons
Quality Requirements Roush Quality Capability Requirements
$ 130.00
$ 130.00
$ 7,800.00
$ 3,900.00
If no-quoting, please provide
explaination:
All quote information provided by Supplier is subject to ROUSH's review, and may be accepted or challenged. By signing above and submitting its quote to ROUSH, Supplier represents it (a) has thoroughly
examined and become familiar with the Product(s)/Work covered under the RFQ, which are subject to the Roush Purchase Order General Terms and Conditions and Purchase Order Addendum(s), if applicable,
and (b) is capable of performing the quality of work required to achieve the stated Product(s)/Work objective identified in the RFQ.
Quote Based on Net 60 Payment Terms
Part/Job Work Detail Quantity Total Hours
Minimum
Show Up
Cost
Plumbing Project 1 1 100.00 $ 200.00
Plumbing Project 2 1 50.00
Plumbing Project 3 1 25.00
Purchased Material
Type
Filters & AC Gas
Purchased Material
Cost
$ 20,100.00
Hourly
Rate
$ 150.00
Labor + Overhead
Total Price
$ 35,100.00
Notes
Materials
$ 150.00
$ 150.00
$ 7,500.00
$ 3,750.00
Commodity Manager: Date:
Roush Part Numbers : Customer/Program:
Description: SOP:
Roush Business Unit: Program Length (years):
CCR #:
RFQ DUE DATE:
Additional QCR's: List out applicable…. Service Requirements Yes
PPAP: Yes Required PPAP: None Feasibility Study Yes *See Tab 2
ITAR: No Conflict Minerals: Yes Packaging Questionnaire: Yes *See Tab 3
USA Material: No Material Cert: Yes Capacity Analysis: Yes *See Tab 4
USA Mfg.: No Process Certs: Yes Freight: Yes *If yes, please include freight in quote.
Inspection Reports: No Welding Docs: Yes Warranty:
NDT Test Reports: No First Article: No
PPAP Due Date PPAP Qty:
Supplier Name: Shipping Location:
Contact: Manufacturing Location:
Supplier Annual Sales: Manufacturing Method:
Tooling Lead Time: Production Lead Time:
PPAP/FAI Lead Time:
Part/Job Work Detail Quantity Total Hours
Minimum
Show Up
Cost
Plumbing Project 1 1 100.00 $ 200.00
Plumbing Project 2 1 50.00
Plumbing Project 3 1 25.00
Name: Date
Totals $ 46,350.00
Sumit
1.2 Million
Purchased Material
Type
Filters & AC Gas
Purchased Material
Cost
$ 20,100.00
Hourly
Rate
$ 150.00
Labor + Overhead
Total Price
$ 35,100.00
Notes
Materials
Inquiry #
Request for Quote
Additional Requirements
All of the requested criteria on this RFQ form must be provided within this form and submitted to the buyer by the
due date above.
Always review the Guideline & Assumptions and Program Specific Requirements (if applicable) before completing the RFQ.
Review/fill out attached Purchase Order Addendums (if applicable)
AD Enterprises
Quality Requirements Roush Quality Capability Requirements
$ 150.00
$ 150.00
$ 7,500.00
$ 3,750.00
If no-quoting, please provide
explaination:
All quote information provided by Supplier is subject to ROUSH's review, and may be accepted or challenged. By signing above and submitting its quote to ROUSH, Supplier represents it (a) has thoroughly
examined and become familiar with the Product(s)/Work covered under the RFQ, which are subject to the Roush Purchase Order General Terms and Conditions and Purchase Order Addendum(s), if applicable,
and (b) is capable of performing the quality of work required to achieve the stated Product(s)/Work objective identified in the RFQ.
Quote Based on Net 60 Payment Terms
Commodity Manager: Date:
Roush Part Numbers : Customer/Program:
Description: SOP:
Roush Business Unit: Program Length (years):
CCR #:
RFQ DUE DATE:
Additional QCR's: List out applicable…. Service Requirements Yes
PPAP: Yes Required PPAP: None Feasibility Study Yes *See Tab 2
ITAR: No Conflict Minerals: Yes Packaging Questionnaire: Yes *See Tab 3
USA Material: No Material Cert: Yes Capacity Analysis: Yes *See Tab 4
USA Mfg.: No Process Certs: Yes Freight: Yes *If yes, please include freight in quote.
Inspection Reports: No Welding Docs: Yes Warranty:
NDT Test Reports: No First Article: No
PPAP Due Date PPAP Qty:
Supplier Name: Shipping Location:
Contact: Manufacturing Location:
Supplier Annual Sales: Manufacturing Method:
Tooling Lead Time: Production Lead Time:
PPAP/FAI Lead Time:
Part/Job Work Detail Quantity Total Hours
Minimum
Show Up
Cost
Plumbing Project 1 1 160.00 $ 150.00
Plumbing Project 2 1 60.00
Plumbing Project 3 1 30.00
Name: Date
Totals $ 60,500.00
Andy
0.9 Million
Purchased Material
Type
Filters & AC Gas
Purchased Material
Cost
$ 28,000.00
Hourly
Rate
$ 130.00
Labor + Overhead
Total Price
$ 48,800.00
Notes
Materials
Inquiry #
Request for Quote
Additional Requirements
All of the requested criteria on this RFQ form must be provided within this form and submitted to the buyer by the
due date above.
Always review the Guideline & Assumptions and Program Specific Requirements (if applicable) before completing the RFQ.
Review/fill out attached Purchase Order Addendums (if applicable)
JK Sons
Quality Requirements Roush Quality Capability Requirements
$ 130.00
$ 130.00
$ 7,800.00
$ 3,900.00
If no-quoting, please provide
explaination:
All quote information provided by Supplier is subject to ROUSH's review, and may be accepted or challenged. By signing above and submitting its quote to ROUSH, Supplier represents it (a) has thoroughly
examined and become familiar with the Product(s)/Work covered under the RFQ, which are subject to the Roush Purchase Order General Terms and Conditions and Purchase Order Addendum(s), if applicable,
and (b) is capable of performing the quality of work required to achieve the stated Product(s)/Work objective identified in the RFQ.
Quote Based on Net 60 Payment Terms
Part/Job Work Detail Quantity Total Hours
Minimum
Show Up
Cost
Plumbing Project 1 1 160.00 $ 150.00
Plumbing Project 2 1 60.00
Plumbing Project 3 1 30.00
Purchased Material
Type
Filters & AC Gas
Purchased Material
Cost
$ 28,000.00
Hourly
Rate
$ 130.00
Labor + Overhead
Total Price
$ 48,800.00
Notes
Materials
$ 130.00
$ 130.00
$ 7,800.00
$ 3,900.00
16
Basic Of Cost Visibility - Supplier Filled Roush RFQ (Indirect)
AD Enterprise JK Sons Quote
Basics of Cost Visibility & Comparison (Indirect Service)
Rate Benmarking
AD Enterprise JK SONS AD Enterprise JK SONS AD Enterprise
Plumbing Rate 150.00$ 130.00$ 150.00$ 130.00$ 130.00$
Activity Breakdown
Project 1 100 160 15,000$ 20,800$ 13,000$
Project 2 50 60 7,500$ 7,800$ 6,500$
Project 3 25 30 3,750$ 3,900$ 3,250$
Mateial Cost 20,100.00$ 28,000.00$ 20,100$ 28,000$ 20,100$
Totals 46,350$ 60,500$ 42,850$
Opportunity Additional Opportunity
14,150$ 3,500$
% %
30.5% 7.6%
Minimum Show Up Cost 200.00$ 150.00$
Cost
PLUMBING COST BREAKDOWN, COMPARISON & BENCHMARKING
Hours
Recommendation
• Have Cost Breakdown for Direct & Indirect Parts & Services
• Prefer Commodity based Cost Breakdown for Direct & Indirect Parts & Services
• Cost Formula “Cost = Rate X Usage” can be used for both Direct & Indirect Services.
• At Minimal Perform Benchmarking at Cost Level (by each cost category) – Material, Processing, SG&A
• In order to get more opportunity perform Benchmarking at Rate & Usage Level (for each categories)
What is the Basic Costing Formula?
Answer Options
A. Cost = (Rate) / (Usage)
B. Cost = (Rate) x (Usage)
C. Cost = (Rate) + (Usage)
D. Cost = 2 x ((Rate) x (Usage))
Test QuestionQ
ue
stio
n 1
Qu
est
ion
2
The Basic Costing formula is applied to which of the below mentioned items?
Answer Options
A. Material
B. Process Cost
C. SG&A + Profit
D. All of the Above
The Basic Costing formula can be applied to?
Answer Options
A. Manufacturing Industry
B. Service Industry
C. Indirect Purchases
D. All of the Above
Test Question…continuedQ
ue
stio
n 3
Qu
est
ion
4
In Costing Formula (Cost = Rate X Usage), identify correct example of a Rate?
Answer Option
A. 2 # of Purchased LT20 CNC Turning Machine,
B. 10 # of Fire Extinguisher for Factory Premises
C. 150 $/Pcs for Fire Extinguisher.
D. 2000 Meters of Electric Wire for Office electricity connection.
In Costing identify correct example of Usage
Answer Option
A. 2.0 $/Lbs of Steel in Material
B. 10 Inches of Laser Cutting
C. 3 Inch/Minute of Laser Cutting Speed
D. Direct Labor Rate of 20 $/Hour
Test Question…continuedQ
ue
stio
n 5
Qu
est
ion
6
In Costing identify correct example of Rate?
Answer Option
A. 2 Lbs of Steel in Material,
B. 3 Bends in Press Brake
C. 30 Inch/Minute of Welding Speed
D. 2 # of Direct Operator on Laser Machine
Test Question…continuedQ
ue
stio
n 7
Qu
est
ion
8
While cost benchmarking what item do we analyze
Answer Options
A. Cost Per Pound for Steel, Pounds of Steel Used
B. Cycle Time to produce one part.
C. SG&A and Profit Percentage
D. All of the above.
Select Appropriate Example of Direct Labor
Answer Options
A. Operator involved in producing injection molded part on Injection Molding machine.
B. Operator painting the finished component for the customer.
C. A forklift driver moving the parts.
D. Both A & B.
Test Question…continuedQ
ue
stio
n 9
Qu
est
ion
10
Identify Direct Material from below list
Answer Options
A. Fixture for Welding
B. Steel Billet in Forging Plant.
C. Blasting Iron Shots in Forging Plant
D. Generic Re-useable Masking Plugs for Painting.
What do you mean by SG&A Cost
Answer Options
A. It is the Cost Associated with Material Acquisition.
B. It is Cost Associated with Setting up of Process.
C. All cost associated with Corporate Overhead.
D. Shipping & Warehousing.
Test Question…continuedQ
ue
stio
n 1
1Q
ue
stio
n 1
2
What is the typical profit range in manufacturing industry
Answer Options
A. 0-5%
B. 5-25%
C. 25-50%
D. 50-75%
Define Profit Margin in Costing.
Answer Options
A. Profit Margin is financial gain and is percentage to sell price.
B. Profit Margin is the direct labor cost.
C. Profit Margin is the processing cost in manufacturing.
D. Profit Margin is the is the material cost.
Test Question…continuedQ
ue
stio
n 1
3Q
ue
stio
n 1
4
What do you mean by Gross Weight while costing material?
Answer Options
A. Gross Weight is the weight of the finished part.
B. Gross Weight is the actual weight required while producing a part.
C. None of the above
What is Engineered Scrap Cost in Material.
Answer Options
A. It is the cost of total material used in manufacturing.
B. It is the cost of the material based on net weight of the part.
C. It is the cost of the difference between Gross weight and Net weight of the material .
D. None of the above.
What is the typical Cost Breakdown for a indirect plumbing work
Answer Options
A. Final Plumbing Cost
B. Hourly Labor Rate, Hour Required for each activity, Individual Price & Quantity for Consumables, Others Charges
C. None of the above.
Test Question…continuedQ
ue
stio
n 1
5Q
ue
stio
n 1
6
What would you like to Benchmark between different quotes for plumbing work to identify
maximum saving
Answer Options
A. Compare Final Price between each quote
B. Analyze Hourly Labor Rate & Hours Required.
C. Analyze Individual Price & Quantity for Materials. Also Analyze Others Charges.
D. Both B & C