Managerial Accounting - Standard Cost Professor: Martin Taylor Team 5 – Kevin Zheng December 14...

Managerial Accounting - Standard Cost

Professor: Martin Taylor

Team 5 – Kevin Zheng

December 14th, 2012

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University of TexasAt Arlington

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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/

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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

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Lamex Products


Seating

IcaoAcuity Gradient FitJoin me

Majesty Grande Tiper

Metal Casegoods Cabinets Central Data Storage Mobile Pedestal

Systems

Desking

Storage

Monarch

Empire

Rondo U2 Rateo

Pride

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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.


Material Cost Labor Cost Overhead

Standard Cost

SG&A - Selling, General and Administrative Expenses

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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)


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Seating BOM Cost


a b c=a*b d e=c*d

SAP no. Model Seq. Level Component Description BOM Qty Scrap Ratio BOM UnitBomtotusage

Old UnitCost (bas)

New UnitCost (bom)

New Cost

4013053570 IC2C55-BK-800 0 0 4013053570 中背椅,有扶手,五星爪脚 1 0 PC 1 0 0 171.68

4013053570 IC2C55-BK-800 1 0.1 4013000350 椅子，艾基奥 1 0 PC 1 0 0 171.68

4013053570 IC2C55-BK-800 2 ..2 3010024960 座组合，定盘机关，艾基奥 1 0 PC 1 0 0 25.27

4013053570 IC2C55-BK-800 3 ...3 3010036370 座板，定盘和摇盘机关用，艾基奥，有蟹爪 1 0 PC 1 0 0 9.87

4013053570 IC2C55-BK-800 4 ....4 3010025300 座板,定盘机关用,无蟹爪,艾基奥 1 0 PC 1 0 0 8.37

4013053570 IC2C55-BK-800 5 .....5 1010001170 木皮,1.5MM THK,550X550MM,荷木 9 11.12 PC 10.001 0.73 0.73 7.3

4013053570 IC2C55-BK-800 6 .....5 3010002850 胶水,CASCO木胶水 0.296 10 KG 0.326 0 0 1.07

4013053570 IC2C55-BK-800 7 ......6 1810004350 胶水,夹板用 0.268 0 KG 0.268 3.68 3.68 0.99

4013053570 IC2C55-BK-800 8 ......6 1810004360 硬化剂，夹板用 0.027 0 KG 0.027 2.99 2.99 0.08

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 0 BOX 0.03 3.63 3.63 0.11

4013053570 IC2C55-BK-800 12 ...3 3010025030 座组合，艾基奥 1 0 PC 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

4013053570 IC2C55-BK-800 18 ...3 1020062531

4013053570 IC2C55-BK-800 19 ...3 1020072810

4013053570 IC2C55-BK-800 20 ...3 1040020420

4013053570 IC2C55-BK-800 21 ..2 3010025040 扪布组，座，艾基奥 0.5 0 PC 0.5 0 0 4.06

4013053570 IC2C55-BK-800 22 ...3 3010021040

4013053570 IC2C55-BK-800 23 ....4 3010021020

4013053570 IC2C55-BK-800 24 .....5 1040019340

4013053570 IC2C55-BK-800 25 ..2 3010028930

4013053570 IC2C55-BK-800 26 ...3 1040005020

4013053570 IC2C55-BK-800 27 ...3 1020001260

4013053570 IC2C55-BK-800 28 ...3 1020071820

4013053570 IC2C55-BK-800 29 ...3 1020072430

4013053570 IC2C55-BK-800 30 ...3 1020030091

4013053570 IC2C55-BK-800 31 ..2 1030060220

4013053570 IC2C55-BK-800 32 ..2 3010028910

4013053570 IC2C55-BK-800 33 ...3 1020081110

4013053570 IC2C55-BK-800 34 ...3 1030004780

4013053570 IC2C55-BK-800 35 ...3 1020000780

4013053570 IC2C55-BK-800 36 ...3 1020000770

4013053570 IC2C55-BK-800 37 ..2 1040008380

4013053570 IC2C55-BK-800 38 ..2 1020067670

4013053570 IC2C55-BK-800 39 ..2 1030024850

4013053570 IC2C55-BK-800 40 ..2 1020046880

4013053570 IC2C55-BK-800 41 ..2 1030004710

4013053570 IC2C55-BK-800 42 ..2 3010033760

4013053570 IC2C55-BK-800 43 ...3 1030025170

4013053570 IC2C55-BK-800 44 ...3 1030025180

4013053570 IC2C55-BK-800 45 ...3 1020007390

4013053570 IC2C55-BK-800 46 ...3 1020006063

4013053570 IC2C55-BK-800 47 ...3 1020084300

4013053570 IC2C55-BK-800 48 ..2 3010043370

4013053570 IC2C55-BK-800 49 ...3 1070000150

4013053570 IC2C55-BK-800 50 ...3 1070003560

4013053570 IC2C55-BK-800 51 ...3 1990041410

4013053570 IC2C55-BK-800 52 ...3 1030000080

SAP no. Model Seq. Level Component Description产品编号型号顺序号 BOM层级零件号零件描述

a b c=a*b d e=c*d

4013053570 IC2C55-BK-800 0 0 4013053570

4013053570 IC2C55-BK-800 1 0.1 4013000350 椅子，艾基奥 1 0 PC 1 0 0 171.68

4013053570 IC2C55-BK-800 2 ..2 3010024960 座组合，定盘机关，艾基奥 1 0 PC 1 0 0 25.27

4013053570 IC2C55-BK-800 3 ...3 3010036370 座板，定盘和摇盘机关用，艾基奥，有蟹爪 1 0 PC 1 0 0 9.87

4013053570 IC2C55-BK-800 4 ....4 3010025300

4013053570 IC2C55-BK-800 5 .....5 1010001170

4013053570 IC2C55-BK-800 6 .....5 3010002850

4013053570 IC2C55-BK-800 7 ......6 1810004350

4013053570 IC2C55-BK-800 8 ......6 1810004360 硬化剂，夹板用 0.027 0 KG 0.027 2.99 2.99 0.08

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

4013053570 IC2C55-BK-800 11 ...3 1020001260

4013053570 IC2C55-BK-800 12 ...3 3010025030 座组合，艾基奥 1 0 PC 1 0 0 10.93

4013053570 IC2C55-BK-800 13 ....4 3010005380

4013053570 IC2C55-BK-800 14 .....5 1810010650

4013053570 IC2C55-BK-800 15 ....4 3010028570

4013053570 IC2C55-BK-800 16 .....5 1100001650

4013053570 IC2C55-BK-800 17 ...3 1040008320

4013053570 IC2C55-BK-800 18 ...3 1020062531

4013053570 IC2C55-BK-800 19 ...3 1020072810

4013053570 IC2C55-BK-800 20 ...3 1040020420

4013053570 IC2C55-BK-800 21 ..2 3010025040 扪布组，座，艾基奥 0.5 0 PC 0.5 0 0 4.06

4013053570 IC2C55-BK-800 22 ...3 3010021040

4013053570 IC2C55-BK-800 23 ....4 3010021020

4013053570 IC2C55-BK-800 24 .....5 1040019340

4013053570 IC2C55-BK-800 25 ..2 3010028930

4013053570 IC2C55-BK-800 26 ...3 1040005020

4013053570 IC2C55-BK-800 27 ...3 1020001260

4013053570 IC2C55-BK-800 28 ...3 1020071820

4013053570 IC2C55-BK-800 29 ...3 1020072430

4013053570 IC2C55-BK-800 30 ...3 1020030091

4013053570 IC2C55-BK-800 31 ..2 1030060220

4013053570 IC2C55-BK-800 32 ..2 3010028910

4013053570 IC2C55-BK-800 33 ...3 1020081110

4013053570 IC2C55-BK-800 34 ...3 1030004780

4013053570 IC2C55-BK-800 35 ...3 1020000780

4013053570 IC2C55-BK-800 36 ...3 1020000770

4013053570 IC2C55-BK-800 37 ..2 1040008380

4013053570 IC2C55-BK-800 38 ..2 1020067670

4013053570 IC2C55-BK-800 39 ..2 1030024850 脚,五星爪,虎爪形,H-320 1 0 PC 1 23.33 23.33 23.33

4013053570 IC2C55-BK-800 40 ..2 1020046880 气弹簧，青岛三弘 430S28 旧款:777 1 0 PC 1 14.1 14.1 14.1

4013053570 IC2C55-BK-800 41 ..2 1030004710 轮子,50MM 5 0 PC 5 1.01 1.01 5.05

4013053570 IC2C55-BK-800 42 ..2 3010033760 扶手组,奥迅 1 0 PC 1 0 0 18.26

4013053570 IC2C55-BK-800 43 ...3 1030025170 左扶手,PP,酒杯型 1 0 PC 1 7.91 7.91 7.91

4013053570 IC2C55-BK-800 44 ...3 1030025180 右扶手,PP,酒杯型 1 0 PC 1 7.91 7.91 7.91

4013053570 IC2C55-BK-800 45 ...3 1020007390 垫圈,ID8.5OD15X1.5MM,镀镍 6 0 PC 6 0.02 0.02 0.12

4013053570 IC2C55-BK-800 46 ...3 1020006063 螺丝,机牙,M6X35,十字,球面垫圈,白锌,耐落 6 0 PC 6 0.2 0.2 1.2

4013053570 IC2C55-BK-800 47 ...3 1020084300 垫圈,ID12.5OD24X3.0MM,镀白锌 8 0 PC 8 0.14 0.14 1.12

4013053570 IC2C55-BK-800 48 ..2 3010043370 包装组,中背,艾基奥,套餐 1 0 PC 1 0 0 8.9

4013053570 IC2C55-BK-800 49 ...3 1070000150 纸箱,92L62W64HCM,A=B 0.5 0 PC 0.5 12.61 12.61 6.31

4013053570 IC2C55-BK-800 50 ...3 1070003560 纸卡,B=B,110X55CM 1 0 PC 1 1.52 1.52 1.52

4013053570 IC2C55-BK-800 51 ...3 1990041410 PO 光身风琴连卷袋0.02X114.3X152.4CM 1 0 PC 1 1 1 1

4013053570 IC2C55-BK-800 52 ...3 1030000080 封箱胶纸,45码*60MM 0.05 0 RL 0.05 1.45 1.45 0.07

a b c=a*b d e=c*d

BOM Qty Scrap Ratio BOM UnitBomtotusage

Old UnitCost (bas)

New UnitCost (bom)

New CostBOM数量报废率单位总用量旧单价新单价新成本

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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.

• Using the production pilot run to calculate the actual utilization ratio for fabric and leather.


Size:4’x 8’6’x 8’

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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.


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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


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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


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Cost Standard Hour - CSH


SAP No. 物料描述产品型号工序组工序组描述工序工作中心工作中心描述工时类型 ( )人工用时分钟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 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 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 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 10 SEAT- 002 /裁车 L- SEAT 38

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&MANTI S L- SEAT 30

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 10 SEAT- 002 /裁车 L- SEAT 38

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&MANTI S L- SEAT 30

4019100240 , 2D , ,矮背椅扶手黑胶爪瑞姿 RGR- LMA- S2B- 300 60100048 RGR- LMA- S2P- 100 , 2D , ,，矮背椅扶手铝爪瑞姿 10 SEAT- 002 /裁车 L- SEAT 38

4019100240 , 2D , ,矮背椅扶手黑胶爪瑞姿 RGR- LMA- S2B- 300 60100048 RGR- LMA- S2P- 100 , 2D , ,，矮背椅扶手铝爪瑞姿 20 SEAT- 009 EDDY&MANTI S L- SEAT 32

4019100250 , 2D , ,矮背椅扶手黑胶爪瑞姿 RGR- LMA- S2B- 600 60100048 RGR- LMA- S2P- 100 , 2D , ,，矮背椅扶手铝爪瑞姿 10 SEAT- 002 /裁车 L- SEAT 38

4019100250 , 2D , ,矮背椅扶手黑胶爪瑞姿 RGR- LMA- S2B- 600 60100048 RGR- LMA- S2P- 100 , 2D , ,，矮背椅扶手铝爪瑞姿 20 SEAT- 009 EDDY&MANTI S L- SEAT 32

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 10 SEAT- 002 /裁车 L- SEAT 54

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 3

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&MANTI S 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 3

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&MANTI S L- SEAT 50

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 41

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&MANTI S L- SEAT 32

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&MANTI S L- SEAT 32

4019101430 , , 2D , ,中背椅薄咭臣背扶手铝爪瑞姿 RGR- MUA- S2P- 300 60100048 RGR- MUA- S2P- 100 , , 2D , ,，中背椅薄咭臣背扶手铝爪瑞姿 10 SEAT- 002 /裁车 L- SEAT 61

4019101430 , , 2D , ,中背椅薄咭臣背扶手铝爪瑞姿 RGR- MUA- S2P- 300 60100048 RGR- MUA- S2P- 100 , , 2D , ,，中背椅薄咭臣背扶手铝爪瑞姿 20 SEAT- 003 开棉 L- SEAT 3

4019101430 , , 2D , ,中背椅薄咭臣背扶手铝爪瑞姿 RGR- MUA- S2P- 300 60100048 RGR- MUA- S2P- 100 , , 2D , ,，中背椅薄咭臣背扶手铝爪瑞姿 30 SEAT- 009 EDDY&MANTI S L- SEAT 58

4019101440 , , 2D , ,中背椅薄咭臣背扶手铝爪瑞姿 RGR- MUA- S2P- 600 60100048 RGR- MUA- S2P- 100 , , 2D , ,，中背椅薄咭臣背扶手铝爪瑞姿 10 SEAT- 002 /裁车 L- SEAT 61

4019101440 , , 2D , ,中背椅薄咭臣背扶手铝爪瑞姿 RGR- MUA- S2P- 600 60100048 RGR- MUA- S2P- 100 , , 2D , ,，中背椅薄咭臣背扶手铝爪瑞姿 20 SEAT- 003 开棉 L- SEAT 3

4019101440 , , 2D , ,中背椅薄咭臣背扶手铝爪瑞姿 RGR- MUA- S2P- 600 60100048 RGR- MUA- S2P- 100 , , 2D , ,，中背椅薄咭臣背扶手铝爪瑞姿 30 SEAT- 009 EDDY&MANTI S L- SEAT 58

工序组工序组描述工序工作中心工作中心描述工时类型 ( )人工用时分钟工序组工序组描述工序工作中心工作中心描述工时类型 ( )人工用时分钟Group Description Process Work Center Description CSH Type Process Time (minutes)

Time Observation Form

No. 1 2 3 4 5 6 7 8 9 10

0 0 0 0 0 0 0 0 0 0

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.

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.

6. The adjusted component task times can now be used in conjunction with the other "Tools of RCI".

HNI CorporationRapid Continuous Improvement

Part/Model Name: Process: Operator: Observed by:

Part/Model Number: Plant/Dept.: TAKT Time: Date:

Elemental Description Break PointBest Repeatable

Time

-

-

-

-

-

-

-

-

-

-

-

Best RepeatableOverall Cycle

Time

Rapid Continuous Improvement

-

Sum of Elemental Times (Overall Cycle Time): 0

Return to Toolbox

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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


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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


15

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.

University of Texas At Arlington http://www.uta.edu/MRO - Maintenance, Repair & Operations

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Manufacturing Overhead

In Lamex, manufacturing overhead is calculated as:

Overhead = (Material Cost + Labor Cost) / (1 – X%)

X% defined as:

Desking: X1%

Seating: X2%

Systems: X3%

Storage: X4%

Trading: X5%


In-house

Out source

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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


Managerial Accounting - Standard Cost Professor: Martin Taylor Team 5 – Kevin Zheng December 14...

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