Manufactura

C.P.C. JOSE DOLORES ROSAS GONZALEZ; SEGUNDA EVALUACION

System costs for specific production orders

It is the system which applied a process which is not continuous and enterprises in which it is possible to identify specific production batches and follow its path through the various operations until they become finished products.

It is therefore preferably used in companies whose products are quickly identifiable by individual units or production batches to each of which he applied, work, resources and technology to different degrees. This system is especially used for manufacturing orders dealing especially with clients as well as orders and not very often when the production is intended to form stock, as determined by business policy.

The industries that generally use this method are among others:

• The graphic arts.

• Furniture factories

• Of footwear

• Of clothing

• Etc.

Sometimes these companies working to order used elementary calculations of budgets for the work which made. In these cases it is advisable to raise the method with a combination of precomputed and historical costs. These estimates lead to control the cost of a product or batch of products, whose specifications are established by a client and go to constitute the work order.

But the more general system of CPOEP is to apply historical costs, where at the end of the process, the customer accepts the price assigned to product or batch manufactured according to production costs meant the mentioned price.

Flow of the production process in an industry that uses the C.P.O.E.P

Starts to produce must exist a customers order or a decision of the management of the company to manufacture a given product. Any of these alternatives will give origin to the issuing of a document called production order be signed by a responsible Executive (production manager) is sent to the workshop, to be beginning to the production process, this order will have the format that the industry wants to adopt, but that should at least have the following content:

With the arrival of the production order to the workshop starts the manufacturing process for the order specified in the order. For his part in the workshop are also taken necessary measures, with the aim of holding a good control of the process, for which. Opens a registry called cost sheet, which must contain at least the following information:

1. Number of the sheet which must be equal to the production order.

2. Detail of the manufacturing process indicating the characteristics and quantity of the product or batch of production.

3. Start date and end date for the production order.

4. Detail of the MPD employed in the manufacture of the order according to the requisitions issued during the manufacturing process.

5. Detail of the MOD applied in the manufacturing process according to the payroll of direct work recorded in the book of remuneration.

6. Summary of the manufacturing costs incorporated into the product, according to the largest of expenditure of manufacturing.

7. Determination of the unit cost for each item of the manufactured product.

A cost sheet format would be as follows:

...