Productwise Costing/Installation Of Costing System

 

Installation & Design of Costing System means in which each & every element of cost incurred at each stage of production through manpower, machine, material analysis & records will have to be kept in written. The process flow chart of each & every item produced in the company will have to be seen & accordingly records of each & every process of operation through man, machine & material will be kept. On that basis labor hour rate, machine hour rate, material consumption details will have to be calculated accordingly cost incurred at each process of operation will be calculated. So in this way total cost of all of the operations incurred for a component will be calculated on the basis of monthly production of components & expenses incurred at each stage of production & also overheads will have to be allocated & apportioned to components produced during the period. So sale price decision will be taken accordingly & if customer will ready to pay fewer amounts than total cost actually incurred to manufacture the component then the following are advises to the manufacturers to decide the sell price & takeVarious steps to reduce the cost at different stages if customer will ready pay less than what sale price comes to owner. We are also recognized among the most reliable providers of Cost Development Services in India & various leading industries are availing the benefits of Cost-Effective Development System. Normal Cost Price Decision: Sale Price must be equal toVariable Cost + Fixed Cost + Profit.

If customer will ready to pay less than normal cost price then sale price decision should be on the basis of total cost price =Variable cost + fixed cost so that customer will not go from h&s or sale order will not be left. & take various steps to reduce & control cost at various stages of production through value engineering , reduce raw material consumption & look suppliers from which material will be get at lower prices , reduce cycle time taken by the labor & machine for produced the items.

If customer will ready to pay less than total cost price then sale price decision should be on the basis of marginal cost price/variable cost price =variable cost only. Cost so that customer will not go from h&s or sale order will not be left. & take various steps to reduce & control cost at various stages of production through value engineering , reduce raw material consumption & look suppliers from which material will be get at lower rate, reduce cycle time taken by the labor & machine for produced the items.

If number of items sold to same customer then out of that some items may be sold below variable cost only if owner will in profit by the all of items from same customer. So that customer will not go from h&s or sale order will not be left. & take various steps to reduce & control cost at various stages of production through value engineering , reduce raw material consumption & look suppliers from which material will be get at lower prices , reduce cycle time taken by the labor & machine for produced the items.

The impact of such changes has led to worldwide competition for business as shown below:-
Phase of Business environment Decisive Factors * MONOPOLY - Quantity
* QUALITY - Quantity +Quality
* COMPETITION - Quantity +Quality +Price

Key Cost Reduction Areas * MATERIAL COSTS
* CONVERSION COSTS
* OVERHEADS COSTS
* SUSTAINABLE COMPETITIVE EDGE

Gone are the days when the price was fixed by cost plus approach. Now, the prices are fixed by the market & after deducting targeted profit from the market determined price, one has to focus on costs to remain them within the residual value.

Cost Accountant Firm in Faridabad, Cost Accountant Firm in Delhi/NCR / New Cost Audit Rules notified on 31st Dec2014 covering Construction, Infrastructure, Health care, education sector, Aviation sector and related services apart from various other sectors.

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vandana21_cost@yahoo.co.in
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vba@costauditorindia.in

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