COST MODELING FOR COMPOSITE PRODUCTION COST MODELING FOR COMPOSITE PRODUCTION J.Molligan (Intern), S. Yarlagadda, J.Walther (Intern), J.Molligan (Intern), S. Yarlagadda, J.Walther (Intern), University of Delaware Center for Composite Materials Department of Accounting University of Delaware . Center for Composite Materials . Department of Accounting O SC C O SS COS S O C O OVERVIEW SCREENCAP OF SYSTEM COST VS PRODUCTION The purpose of this research was to create an The purpose of this research was to create an ii b d d lf i d i activity based cost model for composite production The premise is to compare all of the different 200000 The premise is to compare all of the different possibilities for producing the part on a cost basis $) possibilities for producing the part on a cost basis Diff t b d( h st ($ Different processes can be used (such as Co hand lay-up compression molding etc ) hand lay up, compression molding, etc.) 20000 Different materials can be used for the 20000 various pieces of the composite part AD 94 CAP 3 various pieces of the composite part AD 94 CAP 3 Volume cost metrics were obtained from vendors to Volume cost metrics were obtained from vendors to ascertain the most beneficial production output ascertain the most beneficial production output between different materials 2000 between different materials Diff i t il t di tl b t d 10 100 1000 10000 100000 Differences in material cost, direct labor costs, and Production capital costs are all taken into consideration when capital costs are all taken into consideration when i ll ibl d ti ibiliti comparing all possible production possibilities ACTIVITY BASED COST ALLOCATION SUMMARY ACTIVITY BASED COSTING ACTIVITY BASED COST ALLOCATION SUMMARY ACTIVITY BASED COSTING COST MODEL 1% F th l i tt k l COST MODEL 1% Further analysis must take place An activity based cost model was TtlC t 5% More volume cost metrics must be An activity based cost model was di d t dt i h Total Cost More volume cost metrics must be used in order to determine where obtained the costs originate from More processes and material the costs originate from More processes and material It helps reflect the demands that Material Labor combinations must be explored cost objects make on the project Di tLb Overhead combinations must be explored C t ti tb ihd cost objects make on the project Direct Labor Materials Capital Costs Overhead Cost options must be weighed The activities are broken up into Capital against performance options The activities are broken up into direct labor materials capital and against performance options direct labor, materials, capital and overhead costs. ACKNOWLEDGEMENTS It i l b k b d ti ACKNOWLEDGEMENTS Raw Materials Process Aid Materials It is also broken up by production This work is supported by the Office of Naval Raw Materials Process Aid Materials 94% process and material recipe This work is supported by the Office of Naval Research through the Advanced Materials process and material recipe tili ed Research through the Advanced Materials Intelligent Processing Center utilized. Intelligent Processing Center. © 2009 U i it fD l ll i ht d © 2009, University of Delaware, all rights reserved

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Page 1: Cost Modeling for Composite Production

COST MODELING FOR COMPOSITE PRODUCTIONCOST MODELING FOR COMPOSITE PRODUCTIONJ.Molligan (Intern), S. Yarlagadda, J.Walther (Intern),J.Molligan (Intern), S. Yarlagadda, J.Walther (Intern),

University of Delaware Center for Composite Materials Department of AccountingUniversity of Delaware . Center for Composite Materials . Department of Accounting

O SC C O S SCOS S O C OOVERVIEW SCREENCAP OF SYSTEMCOST VS PRODUCTION

The purpose of this research was to create anThe purpose of this research was to create an i i b d d l f i d iactivity based cost model for composite productiony p p

The premise is to compare all of the different 200000The premise is to compare all of the different possibilities for producing the part on a cost basis

possibilities for producing the part on a cost basisDiff t b d ( h st

($Different processes can be used (such as

p (hand lay-up compression molding etc )hand lay up, compression molding, etc.)

20000Different materials can be used for the 20000various pieces of the composite part

AD 94 CAP 3various pieces of the composite part

AD 94 CAP 3Volume cost metrics were obtained from vendors toVolume cost metrics were obtained from vendors to

ascertain the most beneficial production outputascertain the most beneficial production output between different materials

2000between different materialsDiff i t i l t di t l b t d 10 100 1000 10000 100000Differences in material cost, direct labor costs, and

Productioncapital costs are all taken into consideration whencapital costs are all taken into consideration when i ll ibl d ti ibiliticomparing all possible production possibilities

ACTIVITY BASED COST ALLOCATION SUMMARYACTIVITY BASED COSTINGACTIVITY BASED COST ALLOCATION SUMMARYACTIVITY BASED COSTINGCOST MODEL 1% F th l i t t k lCOST MODEL 1% Further analysis must take placeAn activity based cost model was

T t l C t5% More volume cost metrics must be

An activity based cost model was d i d t d t i hTotal Cost More volume cost metrics must be used in order to determine where

obtainedthe costs originate fromMore processes and material

the costs originate from More processes and material It helps reflect the demands that

Material Labor combinations must be exploredp

cost objects make on the projectDi t L b Overhead

combinations must be exploredC t ti t b i h d

cost objects make on the projectDirect Labor Materials Capital Costs Overhead

Cost options must be weighed The activities are broken up intoCapital

p gagainst performance options

The activities are broken up into direct labor materials capital and p against performance optionsdirect labor, materials, capital and overhead costs.

ACKNOWLEDGEMENTSo e ead costsIt i l b k b d ti ACKNOWLEDGEMENTS

Raw Materials Process Aid MaterialsIt is also broken up by production

This work is supported by the Office of Naval Raw Materials Process Aid Materials

94%process and material recipe This work is supported by the Office of Naval Research through the Advanced Materials

9 %process and material recipe tili ed Research through the Advanced Materials

Intelligent Processing Centerutilized.

Intelligent Processing Center.