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9. Source Cost Methodology

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    9. Source Cost Methodology 9. Source Cost Methodology Presentation Transcript

    • Universidad CuauhtémocCampus AguascalientesSource Cost Methodology
      Maestría en Administración
    • Contents
      ACCOUNTING STRUCTURE
      1
      SOURCE COST
      2
      FORECAST REVIEW
      3
      COST CURVE
      4
      Source Cost Methodology
      2
    • Profit & Cost Centers Structure
      A well defined Accounting Structure is key to manage the transactions and monitor expenditures efficiently !!
      Source Cost Methodology
      3
    • Account Groups
      By categorizing the accounts in a Source Cost structure, we can assign ownership and delegate responsibility for each category. This is very useful when reviewing actuals and defining forecast plans.
      Source Cost Methodology
      4
    • SourceCostOwnership
      Owners are responsible for actuals and forecast figures
      Source Cost Methodology
      5
    • Cost Pareto
      Direct Material 60%
      Labor & Overhead 40%
      Source Cost Methodology
      6
    • SourceCostReporting
      Actual results can be reviewed periodically and compared against another period of time.
      The monitoring of expenditures is necessary to aim a proactive decision making.
      Source Cost Methodology
      7
    • Volume TREND
      QUANTITY (KU)
      Volume is forecasted based on:
      • Beginning Inventory
      • Firm Demand
      • Estimated Demand
      • Ending Inventory
      Source Cost Methodology
      8
    • Direct Materials
      Source Cost Methodology
      9
    • Direct Materials
      Cost Reduction Programs
      • Price Negotiations
      • Yield & UsageImprovement
      • ProcessImprovement
      • Developlowcostsuppliersources
      • “Think of out of the box tofindcostopportunities”
      Source Cost Methodology
      10
    • Labor & Overhead
      Source Cost Methodology
      11
    • Labor & Overhead
      Cost Reduction Programs
      • ProductivityImprovement
      • Peoplefficiency
      • Equipmentefficiency
      • Overtime Control
      • Tight control onDiscretionaryExpendings
      • Be flexible. Adjustresourcestodemandlevels
      • “Think of out of the box tofindcostopportunities”
      Source Cost Methodology
      12
    • Financial Summary
      13
      Source Cost Methodology
    • 14
      Cost TREND
      QUANTITY (KU)
      COST ($/UNIT)
      Source Cost Methodology
    • Theorethical BEST - MODEL
      Cost Curve View
      Variable Portion: 52%
      Source Cost Methodology
      15
    • FinanceTemplate
      EXCEL SPREADSHEET
      Source Cost Methodology
      16
    • Questions ?
      Maestría en Administración