CONTROLLING AND TRACKING UNIT COSTS

A COMPLETE PRODUCT EVALUATION PROCEDURE SHOULD BE CONDUCTED PRIOR TO BEGINNING ANY WORK ON A PROJECT. CRITICAL TO THIS PROCESS IS DETERMINING THE UNIT COST WHICH WILL BE INVOLVED WHEN THE PRODUCT GOES INTO PRODUCTION, POSSIBLY SEVERAL YEARS IN THE FUTURE. THE BEST PROCEDURE IS TO MAINTAIN A FILE OF...

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Bibliographic Details
Published in:Strategic finance (Montvale, N.J.) N.J.), 1976-11, Vol.58 (5), p.47
Main Authors: Sprigg, William T, Hanson, Alan, ET AL
Format: Magazinearticle
Language:English
Subjects:
Control
Cost estimates
Costs
Evaluation
Product
Unit
Online Access:Get full text
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Summary:A COMPLETE PRODUCT EVALUATION PROCEDURE SHOULD BE CONDUCTED PRIOR TO BEGINNING ANY WORK ON A PROJECT. CRITICAL TO THIS PROCESS IS DETERMINING THE UNIT COST WHICH WILL BE INVOLVED WHEN THE PRODUCT GOES INTO PRODUCTION, POSSIBLY SEVERAL YEARS IN THE FUTURE. THE BEST PROCEDURE IS TO MAINTAIN A FILE OF THE DIFFERENT COST FACTORS. THIS SHOULD BE UPDATED AS BETTER INFORMATION IS AVAILABLE OR CHANGES ARE MADE. THIS FILE SHOULD BE REVIEWED PERIODICALLY TO DETERMINE IF THE PROJECT IS STILL PROFITABLE. THIS FILE CAN BE DIVIDED INTO TWO SECTIONS. THE FIRST IDENTIFIES THE SOURCE OF THE COST ESTIMATE FOR EACH PRODUCT PART, SUCH AS ENGINEERING OR PURCHASING DEPARTMENT ESTIMATE. THE SECOND SECTION IDENTIFIES COST FOR EACH ASSEMBLY, INCLUDING MATERIAL AND LABOR. MANY TIMES NEW-PRODUCTS ARE SIMILAR TO PRODUCTS ALREADY IN PRODUCTION. IN THESE CASES, THE COSTS CAN BE DETAILED AS VARIANCES TO THE PRODUCTS ALREADY IN PRODUCTION. CHARTS.
ISSN:1524-833X