Cost by Processes (%)
The Cost by Process (%) panel shows which process(es) are contributing the most to the cost of manufacturing the part. A process that seems excessively costly may be a candidate for further investigation and possibly a design improvement.
The percentage contribution of each process is calculated by comparing the sum of various process-related costs for that specific process, to the sum of these costs across all processes used in the routing. This sum is used rather than basing the percentage on Piece Cost or Fully Burdened Cost (FBC), because for some processes the Material cost is included in Piece Cost and FBC and would result in a skewed comparison. Therefore, the Cost by Process calculations assume no contributions from Material, Material Overhead, SG&A, or Margin.
The calculation is:
Process:
(Labor Cost + Direct Overhead + Logistics + Amortized Batch Setup Costs +
(Other Direct Costs - Material Overhead) + Indirect Overhead Costs +
Fixed Costs) for the process
(Other Direct Costs - Material Overhead) + Indirect Overhead Costs +
Fixed Costs) for the process
Divided by:
Sum of (Labor Cost + Direct Overhead + Logistics + Amortized Batch Setup Costs +
(Other Direct Costs - Material Overhead) + Indirect Overhead Costs +
Fixed Costs) for ALL processes
(Other Direct Costs - Material Overhead) + Indirect Overhead Costs +
Fixed Costs) for ALL processes
Note that clicking the Process column heading will sort the table alphabetically and clicking the Percent Cost heading will sort the table numerically.