Production Managment

1. Present:
Arvizu Partida Julia Isabel
Lozano Gracia Saúl
Guaymas, Sonora. 06/ June/ 2017
University technician in industrial processes,
area manufacturing.
Universidad Tecnológica de Guaymas
Costs related to manufacturing

2. Introduction
In this issue we will talk about cost related to manufacturing that
takes place in a product. Referred to as raw material, materials and
labor costs are classifield.

3. Costs
• A cost is a monetary amount that it must pay to have
goods and services to reach benefits.
• The cost is defined as a value to get goods or services
through of the reduction of assets or when incurring
liabilities at the time the benefits are obtained.

4. Manufacture
It is the raw material that is transformed into products.
Includes product design, the selection of raw material and
the sequence of processes through of which the product
will be manufactured.
Input
Process
Output

5. Manufacturing Costs
it's the cost generated during the manufacture of a product or
service, is found represented by three basic elements.
• Raw Material.
• Workforce.
• Production Cost.

6. Manufacturing
costs
Direct costs
• Direct raw material:
Animals, vegetables,
minerals
• Direct materials: supplies/
inputs
• Direct labor: Land,
wages, pensions, etc.
Indirect costs
• Indirect materials:
Equipment, tools,
cleaning materials,
spare parts, lubricants,
fuels, etc.
• Indirect labor: Hades
of production,
maintenance, guards,
supervisors, etc.

7. Direct costs
They are those costs of resources which are
physically incorporated to the final product and its
packaging. It also provides for the necessary work
for the handling and processing of the product.
Those that form part of the direct costs are variable
costs.

8. Direct costs
• Direct raw material: they are resources that in the
productive processes will enter and it turns in
part or in whole in the final product.
Flour

9. • Direct materials: They are materials or processed
items that accompany the end product and are not
physically part of him, but are marketed jointly
(containers, wrappers, label, packaging, etc.).

10. • Direct labor: It is the force and labor that is in direct
contact with the manufacturing of a specific product,
which has to produce the company.

11. Indirect Costs
They are costs of resources involved in the production
process, but that is not physically incorporated into the
finished product. They are involved to the productive
period and not to the finished product.

12. Indirect Materials: They are inputs that can be quantified in
the product and which are involved in the production
process, but are not physically incorporated into the finished
product.
Indirect costs

13. Indirect labor: It is that labor who is not directly involved in the
production or transformation of commodity raw materials or in
the obtaining of the final product, (heads of production,
maintenance, supervisors and guards).

14. Indirect expenses
They are costs to keep the company fully in
operation. Examples; insurance, utilities, repairs, etc.
These expenditures are grouped into general costs
(fixed costs).

15. They are those costs that do not relate directly to the
manufacture, but contribute and are part of the cost of
production. These are not classified as direct labor or
direct materials. They also refer to the accumulation of
indirect expenses.
Indirect manufacturing costs

16. The elements of indirect manufacturing
costs
• Indirect materials
• Indirect labor
• Heating, light, and power for the factory.
• The building of the plant and equipment
depreciation of factory.
• Maintenance of the building and equipment of
manufactures.
• Property tax building of manufactures.

17. Indirect manufacturing costs
• Indirect variable manufacturing cost: the bigger set
of units produced.
• Fixed indirect manufacturing cost: remains constant
independent of production levels.
• Indirect manufacturing cost mixed / semi variable:
they are not completely fixed or variable has
characteristics of both. These costs increase or
decrease with changes in production.

18. Production costs
The set of spending that are needed to produce or
maintain a product or a service.

19. Form
• Prime cost: Its the cost of the material + Workforce cost
• Conversion cost: The cost of direct labor + Direct manufacturing
cost
• Total cost: Production cost + All expenses necessary to make the
product
CP= MPD + MOD
CC= MOD + CIF
CT= MD + MOD + CIF + Expenses

20. • Unit cost of production: Final cost of each unit / Cost of
production per units produced
• Production cost: Its the sum of the three elements of cost.
CPP / Number of units
produced
CPD= MPD + MOD + CIF

21. Exercise
La CIA galletas del Caribe cuyo objeto social es la fabricación de
galletas, cuenta con la siguiente información durante un proceso
productivo:

22. La compañía elaboro 20 cajas de 12 unidades. Se pide:
• Determinar el costo de producción (MPD, MOD, CIF).
• Determinar los costos primos y los costos de conversión.
• Determinar el costo unitario de cada galleta.

23. Exercise
• Hojuelas $ 250,000
• Crema de chocolate $ 80,000
• Sueldo del supervisor $ 25,000
• Aceite $ 15,000
• Sueldo de secretaria de
producción $ 5,000
• Auxiliar de repostería $ 8,000
• Departamento de maquinaria de
producción $ 14,000
• Huevos $ 3,000
• Mantenimiento preventivo $
7,000
• Sueldo pastelero $ 25,000
• Portero de fabrica $ 5,000
• Seguro de maquinaria $
4,000
• Harina $ 40,000
• Servicios públicos $ 6,000
• Caja x unidad $ 400
• Salario vendedor $ 10,000

24. La compañía elaboro 50 cajas de 12 unidades. Se pide:
• Determinar el costo de producción (MPD, MOD, CIF).
• Determinar los costos primos y los costos de conversión.
• Determinar el costo unitario de cada galleta.