COSTING METHODS

E-max RM6 encapsulates all the current costing approaches: absorption costing marginal costing activity based costing standard costing

We tend to select the one that suits the company more. If for example a company made mostly to order but some parts were made to stock a mixture of methods would be used.

Our objective is to create a constructive tension between the sales and production functions where all product costs are fully transparent and unprofitable sales cannot be made thro ignorance. The only option is to get everybody together and focus on innovation and continuous improvement.

SHORTCUTS THAT GENERATE LONG TERM CHANGE

Companies sometimes find that the process of recording accurate actual times is very difficult. We can often get round this problem by providing alternative rough cut methods of measuring efficiency. Often this is the first time that managers appear in control of work at job level and thus able to measure problem areas.

Labour resource management

Personnel evaluation based on actual performance figures is the result of a fully functioning shop floor data collection system.

Process and machine productivity can be done on a period basis thus not having to wait for jobs to be complete to measure productivity.

Esplananct

An approach that measures the efficiency of organisations that tend to make one off parts. It compares estimated costs and times at quote stage, with estimated costs and times after planning and then again with the actual. The result is:

• the estimating function can check the accuracy of the original quote and hence adopt faster and more rough cut methods with safety.
• actual times are measured against planned thus easy to identify if it was sales or production that caused any loss
• the company can also compare the quoted time with the actual giving an indicator of overall efficiency.