福特成本计算课件

Activity Based Costing/GRIMMn nABC Definition/Disclosure/Background Pg.4&5ABC Definition/Disclosure/Background Pg.4&5n nElements of a Cost Estimate&Diagram Pg.6&7Elements of a Cost Estimate&Diagram Pg.6&7n nDirect Labor.Pg.9-11Direct Labor.Pg.9-11n nIndirect Labor.Pg.12Indirect Labor.Pg.12n nFringe Benefits.Pg.13Fringe Benefits.Pg.13n nMRO Labor.Pg.14&15MRO Labor.Pg.14&15n nLabor Summary.Pg.16Labor Summary.Pg.16n nLABOR Frequently asked Questions&Answers.Pg.17-18LABOR Frequently asked Questions&Answers.Pg.17-18TABLE OF CONTENTS:PRESENTATION PREPARED BY:Diane M.Blair(dblair12)ext.33-78525)PRESENTATION PREPARED BY:Diane M.Blair(dblair12)ext.33-78525)Burden Analysis,Cost Optimization Dept.Burden Analysis,Cost Optimization Dept.Labor PresentationLabor Presentation1 1 Activity Based Costing/GRIMMn nDepreciation Pg.21&22Depreciation Pg.21&22n nInterest.Pg.23&24Interest.Pg.23&24n nInsurance .Pg.25Insurance .Pg.25n nUtilities.Pg.26Utilities.Pg.26n nIndirect Materials.Pg.27Indirect Materials.Pg.27n nMRO(Burden).Pg.28-33 MRO(Burden).Pg.28-33 n nBurden Summary.Pg.34&35Burden Summary.Pg.34&35n nFrequently asked Burden Questions&Answers.Pg.36Frequently asked Burden Questions&Answers.Pg.36TABLE OF CONTENTS:Burden Presentation2 2 ABC Activity Based Costing What is GRIMM and ABC?What is GRIMM and ABC?n nGRIMM-Cost Optimizations DatabaseGRIMM-Cost Optimizations DatabaseGlobal Rates and Information of Machines and Materials.Used to Global Rates and Information of Machines and Materials.Used to accumulate&calculate manufacturing labor&overhead(burden)accumulate&calculate manufacturing labor&overhead(burden)rates.rates.n n Activity Based Cost SystemActivity Based Cost SystemIdentifies the uniqueness of each products processing method to determine Identifies the uniqueness of each products processing method to determine overhead allocation,and applies the cost based on the major elements(Cost overhead allocation,and applies the cost based on the major elements(Cost Drivers).Drivers).Consistent and fair method to compensate suppliers for product cost.Consistent and fair method to compensate suppliers for product cost.Machines operating cost will remain consistent regardless of Machines operating cost will remain consistent regardless of manufacturer.manufacturer.n nConfidentialityConfidentialityGood judgment should be maintained when discussing equipment cost between Good judgment should be maintained when discussing equipment cost between competitive manufactures.Many competitive manufactures.Many machine builders request a non-disclosure agreement.machine builders request a non-disclosure agreement.Sensitive material should only be shared with the supplier for comparison information.Not a“one-sided”sharing Sensitive material should only be shared with the supplier for comparison information.Not a“one-sided”sharing processprocess.3 3 ABC Activity Based Costing n nGRIMM Equipment Representation;GRIMM Equipment Representation;Currently the database represents over 400 equipment manufacturers,and Currently the database represents over 400 equipment manufacturers,and approximately 1600 machines,2300 raw materials,&2900 SBOCs.approximately 1600 machines,2300 raw materials,&2900 SBOCs.(Standard Bought Out Components)(Standard Bought Out Components)New technologies are being studied and continually added to the New technologies are being studied and continually added to the database.database.This system is shared globally,compiling data from 9 countries/regionsThis system is shared globally,compiling data from 9 countries/regionsUnited States,Great Britain,Germany,France,Italy,Mexico;Domestic United States,Great Britain,Germany,France,Italy,Mexico;Domestic and Maquiladora,Spain,and Portugual.and Maquiladora,Spain,and Portugual.Machines and Materials are updated annually.Raw material suppliers are Machines and Materials are updated annually.Raw material suppliers are contacted every year,and the new cost is entered into the system.Machine contacted every year,and the new cost is entered into the system.Machine manufactures are contacted on a three year cycle.During the preceding manufactures are contacted on a three year cycle.During the preceding two years,the PPI(Purchased Price Index,supplied by the Bureau of two years,the PPI(Purchased Price Index,supplied by the Bureau of Labor Statistics)is utilized to update cost on an annual basis.The PPI Labor Statistics)is utilized to update cost on an annual basis.The PPI method of updating has proved to be very accurate,within 1/2%of the method of updating has proved to be very accurate,within 1/2%of the new quotes from the manufacturers.new quotes from the manufacturers.4 4 ABC Activity Based Costing Cost Elements;Cost Elements;n n Materials Materials (includes raw matl.and purchased components)(includes raw matl.and purchased components)n n Labor Labor Direct LaborDirect Labor Indirect Labor(Non-Skilled)Indirect Labor(Non-Skilled)Fringe BenefitsFringe Benefits MRO Labor(Skilled)MRO Labor(Skilled)n n Equipment Overhead(Burden)Equipment Overhead(Burden)DepreciationDepreciationInterest(Opportunity cost)Interest(Opportunity cost)Floorspace Cost(Building and Expenses)Floorspace Cost(Building and Expenses)MRO-Equipment Maintenance (Non-Labor)MRO-Equipment Maintenance (Non-Labor)MRO-Tooling Maintenance(Non-Labor)MRO-Tooling Maintenance(Non-Labor)UtilitiesUtilitiesIndirect MaterialsIndirect MaterialsInsuranceInsurancen n Markups Markups (includes SGA,Profit,End-Item scrap,RD&E,etc)(includes SGA,Profit,End-Item scrap,RD&E,etc)5 5 Cost Estimate Diagram MATERIALLABORBURDENMARKUPSDirect IndirectFringeManufacturingOverheadMRO LaborEnd Item ScrapSG&AProfitRaw MaterialPurchased PartsED&TTOTALLABORTOTAL MFG.COST0-0.7%VariesVariesVaries TOTALESTIMATED PC.PRICE6 6 ABC Activity Based Costing LABOR PRESENTATION7 7 Activity Based Costing LABOR DIRECT LABORDIRECT LABORn nWages of person performing manufacturing process.Wages of person performing manufacturing process.(Value added operations)(Value added operations)n nGenerally expressed in rate per hourGenerally expressed in rate per hourn nCurrently there are 11 primary categories available in CAPE;Currently there are 11 primary categories available in CAPE;General ManufacturingGeneral ManufacturingWiringWiringForgingForgingElectrical/ElectronicsElectrical/ElectronicsRubber&Plastics Rubber&Plastics Textiles FabricationTextiles FabricationAutomotive StampingAutomotive StampingAir BagAir BagBody in WhiteBody in WhiteTool&DieTool&DieNon-Ferrous FoundryNon-Ferrous Foundryn nEach Primary category has 3 to 4 sub categoriesEach Primary category has 3 to 4 sub categories Sub categories are skill level basedSub categories are skill level based8 8 Activity Based CostingLABORDIRECT LABOR CATEGORIES Labor Group CodesAGeneral ManufacturingCForgingDElectrical/ElectronicsERubber/PlasticsGTextile FabricationHWiringJAir Bag(Special Studied)KBody in WhiteMAutomotive StampingPNon-Ferrous FoundryTTool and DieCode DescriptionCode DescriptionSkill Factor CodesA Low Skill Level C High Skill LevelB Medium Skill LevelS Special StudiedAA General Manufacturing/Low SkillEB Rubber Fabrication/Medium SkillKC Body in White Fab./High Skill Examples:9 9n nLabor specifically identified with a value-added step in the Labor specifically identified with a value-added step in the manufacturing process.Each year,during an economic adjustment,manufacturing process.Each year,during an economic adjustment,information is gathered from the following resources.Rates are information is gathered from the following resources.Rates are developed based on the average wage in the commodity.This developed based on the average wage in the commodity.This includes union and non-union shops,and all regions in the targeted includes union and non-union shops,and all regions in the targeted country.They are not intended to reflect any one particular supplier,country.They are not intended to reflect any one particular supplier,but are intended to cover the range of labor cost paid by efficient but are intended to cover the range of labor cost paid by efficient suppliers.suppliers.n nResourcesResources U.S.Department of Labor,Bureau of Labor Statistics;U.S.Department of Labor,Bureau of Labor Statistics;Employment&Earnings ReportEmployment&Earnings Report U.S.Bureau of Census Survey of ManufacturesU.S.Bureau of Census Survey of Manufactures Historical documentation;Supplier/Estimator FeedbackHistorical documentation;Supplier/Estimator Feedback Activity Based Costing LABOR DIRECT LABOR1010 Activity Based Costing LABOR INDIRECT LABORINDIRECT LABORn nPersonnel not directly associated with manufacturing processPersonnel not directly associated with manufacturing processSuch as;Material Handlers,Shipping/Receiving,Quality Control,Such as;Material Handlers,Shipping/Receiving,Quality Control,First Line Supervision&Manufacturing Engineering,etc.First Line Supervision&Manufacturing Engineering,etc.n n Expressed as a percentage of Direct Labor.Expressed as a percentage of Direct Labor.Studies have shown proportional Studies have shown proportional costcost relationships between Direct and relationships between Direct and Indirect labor within commodities.Indirect labor support is applied to Indirect labor within commodities.Indirect labor support is applied to individual commodity categories.individual commodity categories.n nExamples:Examples:Direct Labor Cost Indirect Labor Cost Direct Labor Cost Indirect Labor Cost General Manufacturing;General Manufacturing;$1.00$1.00$0.55$0.55 Rubber&PlasticsRubber&Plastics$1.00$1.00$0.70$0.70 Automotive StampingAutomotive Stamping$1.00$1.00$0.75$0.75 Body in WhiteBody in White$1.00$1.00$1.05$1.05n nResourcesResourcesIndustrial Technologies InstituteIndustrial Technologies InstituteAmerican Foundrymens AssociationAmerican Foundrymens AssociationHistorical documentation;Supplier/Estimator Feedback Historical documentation;Supplier/Estimator Feedback 1111 Activity Based Costing LABOR FRINGE BENEFITSFRINGE BENEFITSn nPersonnel BenefitsPersonnel BenefitsSuch as;Shift premiums,vacation/holiday pay,insurance,pensions,Such as;Shift premiums,vacation/holiday pay,insurance,pensions,tuition reimbursements,clothing allowances,etc.tuition reimbursements,clothing allowances,etc.n n Expressed as a percentage of Direct&Indirect LaborExpressed as a percentage of Direct&Indirect LaborFringe benefits are applied to both the Direct&Indirect personnelFringe benefits are applied to both the Direct&Indirect personnelUnlike Indirect Labor,the percentage of fringe is consistent across Unlike Indirect Labor,the percentage of fringe is consistent across commodities.Currently(2019)recognized at 50%.commodities.Currently(2019)recognized at 50%.n nResourcesResourcesU.S.Department of Labor,Bureau of Labor StatisticsU.S.Department of Labor,Bureau of Labor StatisticsCompensation&Working Conditions ReportCompensation&Working Conditions ReportFord Internal DataFord Internal DataHistorical documentation;Supplier/Estimator Feedback Historical documentation;Supplier/Estimator Feedback 1212 Activity Based Costing LABOR MAINTENANCE,REPAIR&OTHER(MRO)MAINTENANCE,REPAIR&OTHER(MRO)LABORLABORn nPersonnel supporting Equipment,Tooling&BuildingPersonnel supporting Equipment,Tooling&Building Skill Trades Labor,including machine repair,electricians,Skill Trades Labor,including machine repair,electricians,millwrights,pipefitters,tool&die repair,etc.millwrights,pipefitters,tool&die repair,etc.n nCost is based on building maintenance per square meterCost is based on building maintenance per square meter.The system applies a fully accounted skilled trades rate to The system applies a fully accounted skilled trades rate to the amount of floorspace required,including outside the amount of floorspace required,including outside maintenance,office space,warehousing,restroom,etc.maintenance,office space,warehousing,restroom,etc.n nCost is based on the investment valueCost is based on the investment value.The system applies a percentage factor to the investment,The system applies a percentage factor to the investment,so that as the capital requirement increases,so does the so that as the capital requirement increases,so does the amount of maintenance funding.amount of maintenance funding.Equipment and ToolingBuilding1313 Activity Based Costing LABOR MAINTENANCE,REPAIR&OTHER(MRO)MAINTENANCE,REPAIR&OTHER(MRO)LABORLABORn nResources;Resources;R.S.Means Construction and Maintenance ModelsR.S.Means Construction and Maintenance Models Marshall and Shift;Construction AppraisalMarshall and Shift;Construction Appraisal Ford Land DevelopmentFord Land Development European Database,Manufacturing Engineering StudyEuropean Database,Manufacturing Engineering Study Ford Internal Maintenance studiesFord Internal Maintenance studies Equipment ManufacturersEquipment ManufacturersEquipment and ToolingBuilding1414 Activity Based Costing LABOR Labor Summary:Labor Summary:Labor GroupDirect Labor12.56 13.95 15.35Indirect Labor 6.91 7.67 8.44Fringe Benefit 9.93 11.03 12.13 MRO Labor .96 .96 .96General ManufacturingAAABACTotal Labor Rate/hour 30.36 33.61 36.88(50%of dir.+Ind.Labor)(50%of dir.+Ind.Labor)(55%of direct Labor)(55%of direct Labor)(MRO Labor remains constant becauseit is based on Machine&Floorspace,notDirect Labor wage)1515 Activity Based Costing LABOR Labor-Question&AnswersLabor-Question&Answersn nWhen Im negotiating with a supplier,should I change my direct labor When Im negotiating with a supplier,should I change my direct labor rate/hour to match the supplier?rate/hour to match the supplier?No.The direct labor rate is based on the national average,which we No.The direct labor rate is based on the national average,which we believe is the competitive wage all suppliers should be measured against.believe is the competitive wage all suppliers should be measured against.n nDo these rates reflect union shops?Do these rates reflect union shops?Union shops are included in the study,as well as non-union shops.Union shops are included in the study,as well as non-union shops.Regardless if the supplier is union or not,it is their responsibility to Regardless if the supplier is union or not,it is their responsibility to remain competitive.We treat all suppliers equally,not allowing anyone an remain competitive.We treat all suppliers equally,not allowing anyone an advantage over another.advantage over another.n nHow often are rates updated?How often are rates updated?We update all the rates annually.Each year the rates are based on We update all the rates annually.Each year the rates are based on January 1st economics.January 1st economics.n nAre rates/hour based on the region of the country?Are rates/hour based on the region of the country?No,we do not segment the rates by region,only by commodity and skill No,we do not segment the rates by region,only by commodity and skill level.level.1616 Activity Based Costing LABOR Labor-Question&AnswersLabor-Question&Answersn nIf Indirect labor is 55%of Direct Labor,does that mean there are.55 If Indirect labor is 55%of Direct Labor,does that mean there are.55 heads indirect for every direct head?heads indirect for every direct head?No.It means for every dollar spent on direct wages,there are$.55 dollars No.It means for every dollar spent on direct wages,there are$.55 dollars spent for indirect support.spent for indirect support.n nIsnt MRO Labor still indirect labor?Isnt MRO Labor still indirect labor?YES,we have separated it from the unskilled and first line supervisor,YES,we have separated it from the unskilled and first line supervisor,because it is not proportional to direct labor.When you compare Fords because it is not proportional to direct labor.When you compare Fords indirect percentage to a suppliers,you should combine both the“indirect indirect percentage to a suppliers,you should combine both the“indirect category”along with the the MRO Labor category.category”along with the the MRO Labor category.n nWhere is Scrap compensated?Where is Scrap compensated?There are two types of scrap;(1)process scrap is determined by the There are two types of scrap;(1)process scrap is determined by the estimator and applied in the estimate as an allowance,(2)end-item scrap,estimator and applied in the estimate as an allowance,(2)end-item scrap,is a minimal amount applied to finished good,to compensate for is a minimal amount applied to finished good,to compensate for destructive testing,damage in transit,etc.destructive testing,damage in transit,etc.1717 ABC Activity Based Costing BURDEN PRESENTATION (MANUFACTURING OVERHEAD)(MANUFACTURING OVERHEAD)1818 ABC Activity Based Costing Terminology;Terminology;n n“PPI”-Purchased Price Index,Bureau of Labor Statistics“PPI”-Purchased Price Index,Bureau of Labor Statisticsn nLifetime Years-Expected life of equipmentLifetime Years-Expected life of equipmentn nOpportunity Cost-Also referred to as Interest costOpportunity Cost-Also referred to as Interest costn nMRO(Maintenance,Repair&Other)MRO(Maintenance,Repair&Other)n nSG&A(Sales,General&Administration)SG&A(Sales,General&Administration)n nRD&E(Research,Development&Engineering)RD&E(Research,Development&Engineering)n nWork Pattern-20 hrs/day,237 days/yearWork Pattern-20 hrs/day,237 days/yearn nTechnical Availability-Expected Uptime of equipmentTechnical Availability-Expected Uptime of equipmentn nManning Type-three levelsManning Type-three levels 1.Direct labor head associated with equipment1.Direct labor head associated with equipment 2.No direct labor head,but requires indirect support(robots,automation)2.No direct labor head,but requires indirect support(robots,automation)3.No direct labor or indirect labor required(conveyors)3.No direct labor or indirect labor required(conveyors)1919 Activity Based Costing BURDEN DEPRECIATIONDEPRECIATIONn nThe means of compensating supplier for capital equipment used The means of compensating supplier for capital equipment used in the production of Ford parts.in the production of Ford parts.n nFord does not assume total capacity,we pay for what we use.It Ford does not assume total capacity,we pay for what we use.It is the suppliers responsibility to sell is the suppliers responsibility to sell theirtheir available equipment available equipment time.(These costs are paid in SGA allowance).time.(These costs are paid in SGA allowance).n nFord utilizes the straight line method of depreciation over the Ford utilizes the straight line method of depreciation over the entire useful life of the machine.This way the equipment is entire useful life of the machine.This way the equipment is devalued by a constant amount.Many companies use devalued by a constant amount.Many companies use accelerated depreciation for tax purposes.Tax accounting accelerated depreciation for tax purposes.Tax accounting depreciation rules are not necessarily an equitable way to depreciation rules are not necessarily an equitable way to determine a fair price for a given product.determine a fair price for a given product.n nFord should never pay the entire cost of any capital equipment Ford should never pay the entire cost of any capital equipment over the life of a program,unless the expected useful life of that over the life of a program,unless the expected useful life of that capital is equal to or less than the life of the program.capital is equal to or less than the life of the program.2020 Activity Based Costing BURDEN STRAIGHT LINE DEPRECIATION METHODSTRAIGHT LINE DEPRECIATION METHODn nFormula;Formula;(Initial Capital Value)+(Freight&Installation)-(Residual Value)(Initial Capital Value)+(Freight&Installation)-(Residual Value)(Lifetime hours)(Lifetime hours)20 hrs/day x 237 days/yr x 86%utilization x 10 yrs20 hrs/day x 237 days/yr x 86%utilization x 10 yrsn nAssumptions;Assumptions;Initial Capital Cost$500,000 -Cost of MachineInitial Capital Cost$500,000 -Cost of MachineFreight&Installation$50,000Freight&Installation$50,000-10%default if not availabl