Production type costs

o Development of tools for production of the front wing 16.70 DKK/unit

Costs for a single front wing for a Fiat 127 according to the ABC model 91.40 DKK/unit

The full cost model

The full cost model for a single front wing for a Fiat 127:

Direct variable costs:

o Materials, including paint, metal, labels etc. as well as shrinkage (experienced) 21.50 DKK/unit.

o Wages for production workers, including supplement of 28% for training/education, illness, etc. 24.25 DKK/unit

o Transport of purchases, quality control of raw materials 3.30 kr./unit

o Power for production machinery 12.00 DKK/unit

Total 61.05 DKK/unit

Indirect variable costs

o Safety equipment, work clothes, etc. for production workers 2.30 DKK/unit

o Repair and maintenance of production machines. Distributed using machine hours as distribution key 6.90 DKK/unit

o Control of finished goods 4.20 DKK/unit

o Re-calibration of machines 5.90 DKK/unit

o Insurance of production workers 1.25 DKK/unit

Total 20.55 DKK/unit

Direct fixed costs

o Depreciations of production machinery Distributed by using machine hours as distribution key 19.75 DKK/unit

o Development of tools for production of the front wing 16.70 DKK/unit

o Interests in capital tied to machinery (opportunity costs) 1.10 DKK/unit

Total 37.55 DKK/unit

Indirect fixed costs

o Administrative costs

Distributed with turnover as distribution key 4.38 DKK/unit

o Lawyer and accountant

Distributed with turnover as distribution key 0.80 DKK/unit

o Salary and car expenses (directors) 0.20 DKK/unit

o Operation of buildings (maintenance, property taxes, etc.)

Distributed with turnover as distribution key 3.90 DKK/unit

o Interests of capital tied to buildings (opportunity costs) 0.20 DKK/unit

Total 9.48 DKK/unit

Costs of a single front wing for a Fiat 127 according to the full cost model 128.63 DKK/unit

 
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