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
