ipl-logo

Labour Cost Analysis

744 Words3 Pages

Assembly Cost (Labor)

Labor cost is a direct component of cost which specifies the time costs related to the manufacture of the product. Consideration of hours of work of employees and the required amount of time for each part and the final assembly is taken into account.
According to our prediction of sales, we need to manufacture about 14,085 units per year, in order to meet the demand. This means that we need to make 14,085/52/5 = 54 units per day and 54/8 = 6.77 units per hour.
In order to produce the required amount of units per hour and meet the predicted demand, we have to ensure appropriate human resource is allocated at different areas of manufacturing. We estimate that 6.77 units per hour implies approximately:

60 (min / hour) / 6.77 (units / hour) = 8.86 …show more content…

Machinery and Tools Costs (CAD)
1 Injection Molding Machine 15530
2 Molds for injection molding 5500
3 Rod cutting and bending machine 650
4 Drilling machine 350
5 Welding Machine 126
6 Grinding machine 319
7 Fabric cutting machine 550
8 Sewing Machine 45
9 Screw drivers 64
10 Pliers and other tools 36
11 safety equipment 30

BILL OF MATERIALS:

The bill of material presents the finances involved for our product on an annual basis. It gives an estimate of the total manufacturing costs by consideration of material, labour and overheads. Presented below is our bill of material.
We have identified the cost/unit for each of the components, so as to have an idea of cost burden imposed from each unit of cost. Further details of components can be found above, where the materials, machinery, labour and overheads are discussed in more detail.

S/No. Item Total Annual Cost Cost /Unit Raw Materials Plastic 11,268.00 0.80 Steel 173,245.50 12.30 Fabric 271,699.65 19.29 Foam 19,719.00 1.40 Wheels 281,700.00 20.00 Bearings 112,680.00 8.00 Fasteners 35,212.50 2.50 Paint 14,085.00 1.00 Total Raw Materials 919,609.65 65.29

Equipment Investment Injection Molding Machine 15,530.00

Show More
Related

  • Industrialization DBQ

    264 Words  | 2 Pages

    Not only did factories play a key role in making products cheaper, Assembly lines also increased production rates and lowered prices. Because of assembly lines, “five people, each specializing

    Read More

  • Overview Of William S. Henderson & Co.

    1141 Words  | 5 Pages

    The company was founded in the year of 1837 in Quebec Canada by William Henderson. It is controlled by the Selfridges Group with its chairman W. Galen Weston. William was an Irish born individual who started to run his own store called William Ashton & Co which was later changed to the name of William S. Henderson & Co. The business started out as a small single shop that slowly progressed to bigger retail locations. Henderson later sold his store to his brother John as the name again went into revision in 1862 to John Henderson & Co.

    Read More

  • Low Minimum Wage Analysis

    639 Words  | 3 Pages

    North Americans have been a part of an era that struggles with low minimum wage that has resulted poverty in many areas in Canada and United States. Having to work several jobs to support family is a struggle for many growing families. This issue has always been the top headline on newspaper and news channel with workers going on strike or not able to afford going to school yet, the focus is taken away by politicians making statements of the change they will make. People are still waiting on the change, politicians claimed they would make.

    Read More

  • Finance Case Study: The Wilkerson Company

    895 Words  | 4 Pages

    Wilkerson is currently using the traditional costing system. “Companies that use the traditional costing method assume that the volume metric is the underlying driver of manufacturing overhead cost.” Traditional product costing was established when direct material costs and direct labor costs accounted for the bulk of product costs incurred inside a firm. In the Wilkerson company, materials and labor costs are centered around the prices of materials and labor rates.

    Read More

  • Change Order In Construction

    1870 Words  | 8 Pages

    It also includes the unit price for each item. Where the final price of the project depends on the quantities needed to finish the work. 3- The cost plus contract A contract agreement where the purchaser (the buyer ) pays the full cost of all labor and materials, plus an amount for contractor overhead and profit (which is usually a percentage of the labor and material cost).

    Read More

  • Walmart Capacity Planning Analysis

    1069 Words  | 5 Pages

    Capacity planning This is the process of knowing the production capacity an organization needs to meet the changing demands for the products. It helps to determine the quantity of the product needed by a firm to meet the demands of its customers. The capacity planning elements for Walmart are; facility, product and service, and human resource.

    Read More

  • Alice Inc Case Study Solution

    1145 Words  | 5 Pages

    Based on our calculations in Appendix 1. at the first stage support costs were allocated to two existing departments, i.e. Machining and Assembly, based on direct labor hours. Therefore total amount of costs assigned to Machining department is $472.000,00 and to Assembly department is $248.000,00. At the second stage total costs from both departments were distributed to products (Regular and Deluxe). Referring to our calculations in Appendix 1.

    Read More

  • Sport Obermeyer Case Study Solution

    1436 Words  | 6 Pages

    SPORT OBERMEYER, Ltd. EMBA – SEPT 15 – ENG-BL – S2 TEAM A 1. Using the sample data given in Exhibit 10, make a recommendation for how many units of each style Wally Obermeyer should order during the initial phase of production. Assume that all ten styles in the sample problem are made in Hong Kong, and that Obermeyer 's initial production commitment must be at least 10,000 units. (Ignore price differences among styles in your initial analysis.)

    Read More

  • Harley Davidson Case Study Solution

    813 Words  | 4 Pages

    Therefore, their anticipated budget will be $120000 million dollars. This in turn will affects the raw materials budget because they need to buy components which is sufficient to manufacture 3 million bikes and obviously a little more to be in safer position. Based on their sales budget, they would be allocating resources and making sure that there is no wastage of resources. In the same way, Sales budget will affect the other budget too. If the level of sales is high, Raw material Requirement will also be high which in turn will require more labor to process and manufacture this product.

    Read More

  • Operations Management Case Study: American Connector Company

    2441 Words  | 10 Pages

    Consider both DJC’s performance in Kawasaki and its potential in the United States. The cost differences between plants of ACC at Sunnyvale and DJC at Kawasaki has been compared by calculating their manufacturing cost. In 1991, the two plants are located in different countries (US & Japan) and therefore, to compare the costs between the two, the cost indices values that have been provided in the case have been used. The main cost differences between the two companies: DJC and ACC with respect to their plant operations for the years 1986 & 1991 have been shown in Table 1.

    Read More

  • Summary: Marketing And Production Managers Meeting At Grant Enterprises

    182 Words  | 1 Pages

    Second, it would be useful to know the expected labor cost to meet the production requirements. This information establishes the resource

    Read More

  • Advantages And Disadvantages Of Plant-Wide Allocation Methods

    750 Words  | 3 Pages

    Step 5: Allocate overhead costs to products. The activity costs should be absorbed back into the individual products by multiplying the predetermined overhead rate for each activity by the level of cost driver activity used by the product Total activity costs can them be added to labour and material costs as normal.

    Read More

  • Competitive Case Analysis Of Wilkerson's Company

    1770 Words  | 8 Pages

    Therefore on that basis, all products, including pumps would be generating substantial contribution to overhead and profits. Therefore, given the overhead allocation problems, Wilkerson’s best bet would be to adopt the variable costing method for various reasons, as follows: 1. This cost concept provides a better understanding of the effect of fixed costs on the net profits, due to the fact that total fixed cost for the period is shown on the income statement. 2.

    Read More

  • What Is Revlon's Competitive Advantage

    1035 Words  | 5 Pages

    2.4.1 Competitive Rivalry Revlon faces stiff competition from existing cosmetic entities like Estee Lauder and L’Oréal which acquire larger market share along with sustainable competitive edge by innovation (Kumar, et al., 2006). Besides, many luxury brands like Chanel and Dior nowadays join the competition also, launching beauty products. Therefore, Revlon needs constant innovation for survival in the market. 2.4.2 Bargaining Power of Customers

    Read More

  • Problems With Minimum Wage Analysis

    228 Words  | 1 Pages

    The major reason against raising the minimum wage rate is that businesses are unwilling to overcompensate an individual if they have not contributed that amount of value to the company. In the article “Problems With Minimum Wage” author Jason Gillikin addresses this topic. “If an employer needs someone to perform odd jobs, and he values the work at $2 per hour, he will not hire a person if the minimum wage is $7 per hour, thus keeping unemployment in low-wage brackets higher than it would otherwise be” (Gillikin). In order to compensate for the increased cost of paying workers more than what they are contributing, a company may chooses to reduce the amount of total hours worked for each individual in an effort to reach an efficient wage expense.

    Read More

More about Labour Cost Analysis

Open Document