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Cost System Evaluation Rubber Enterprise Case Study

Cost System Evaluation Rubber Enterprise Case Study. ME2605 – Cost Management Fouad El Mernissi Frederico Ottoni Lorena Calvo Pablo Abad. Situation Description. Brazilian Company 120 employees Anual income = R$ 12 million Products: Rubber Technical Components. Process Description.

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Cost System Evaluation Rubber Enterprise Case Study

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  1. Cost System EvaluationRubber Enterprise Case Study ME2605 – Cost Management Fouad El Mernissi Frederico Ottoni Lorena Calvo Pablo Abad

  2. Situation Description • Brazilian Company • 120 employees • Anual income = R$ 12 million • Products: Rubber Technical Components

  3. Process Description Mixture Vulcanization Finishing Packaging • Low Complexity – 4 main processes • High Variety – 300 different products • Intensive hand labour (61% of total costs for workers’ wages) Source: Brunstein et all, 2001

  4. Cost System Direct Operational Expenses Indirect Operational Expenses Raw Materials Administrative Expenses Cost centres Standard Cost Products Departments

  5. Costs Distribution

  6. Cost Centre Demonstration

  7. Two-stage process : example Overheadcostaccounts Manufacturing, industrial administration, engineering Mixture & Preparation Presses Injector L1 … Rubber ring Products

  8. Conclusions and Suggestions Raw Materials Direct Operational Expenses Indirect Operational Expenses Administrative Expenses • Accounting Focus Management Focus • Possibility of applying multiple methods in the company • Importance of identifying the information’s cost-benefit Activity Based Costing Standard Cost Cost Centres Products Departments Losses Process Services Products

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