【正文】 rect labor or indirect labor required (conveyors) 21 Activity Based Costing BURDEN DEPRECIATION ? The means of pensating supplier for capital equipment used in the production of Ford parts. ? Ford does not assume total capacity, we pay for what we use. It is the suppliers responsibility to sell their available equipment time. (These costs are paid in SGA allowance). ? Ford utilizes the straight line method of depreciation over the entire useful life of the machine. This way the equipment is devalued by a constant amount. Many panies use accelerated depreciation for tax purposes. Tax accounting depreciation rules are not necessarily an equitable way to determine a fair price for a given product. ? Ford should never pay the entire cost of any capital equipment over the life of a program, unless the expected useful life of that capital is equal to or less than the life of the program. 22 Activity Based Costing BURDEN STRAIGHT LINE DEPRECIATION METHOD ? Formula。 Administration) ? RDamp。 Other) ? SGamp。(1) process scrap is determined by the estimator and applied in the estimate as an allowance, (2) enditem scrap, is a minimal amount applied to finished good, to pensate for destructive testing, damage in transit, etc. 19 ABC Activity Based Costing BURDEN PRESENTATION ( MANUFACTURING OVERHEAD ) 20 ABC Activity Based Costing Terminology。 Answers ? When I’m negotiating with a supplier, should I change my direct labor rate/hour to match the supplier? ? No. The direct labor rate is based on the national average, which we believe is the petitive wage all suppliers should be measured against. ? Do these rates reflect union shops? ? Union shops are included in the study, as well as nonunion shops. Regardless if the supplier is union or not, it is their responsibility to remain petitive. We treat all suppliers equally, not allowing anyone an advantage over another. ? How often are rates updated? ? We update all the rates annually. Each year the rates are based on January 1st economics. ? Are rates/hour based on the region of the country? ? No, we do not segment the rates by region, only by modity and skill level. 18 Activity Based Costing LABOR Labor Question amp。 Construction Appraisal ? Ford Land Development ? European Database, Manufacturing Engineering Study ? Ford Internal Maintenance studies ? Equipment Manufacturers Equipment and Tooling Building 16 Activity Based Costing LABOR Labor Summary: Labor Group Direct Labor Indirect Labor Fringe Benefit MRO Labor .96 .96 .96 General Manufacturing AA AB AC Total Labor Rate/hour (50% of dir. + Ind. Labor) (55% of direct Labor) (MRO Labor remains constant because it is based on Machine amp。 OTHER (MRO) LABOR ? Resources。 Building ? Skill Trades Labor, including machine repair, electricians, millwrights, pipefitters, tool amp。 Supplier / Estimator Feedback 14 Activity Based Costing LABOR MAINTENANCE, REPAIR amp。 Indirect personnel Unlike Indirect Labor, the percentage of fringe is consistent across modities. Currently (2020) recognized at 50%. ? Resources . Department of Labor, Bureau of Labor Statistics Compensation amp。 Shift premiums, vacation/holiday pay, insurance, pensions, tuition reimbursements, clothing allowances, etc. ? Expressed as a percentage of Direct amp。 Plastics $ $ ? Automotive Stamping $ $ ? Body in White $ $ ? Resources Industrial Technologies Institute American Foundrymens Association Historical documentation。 Manufacturing Engineering, etc. ? Expressed as a percentage of Direct Labor. Studies have shown proportional cost relationships between Direct and Indirect labor within modities. Indirect labor support is applied to individual modity categories. ? Examples: Direct Labor Cost Indirect Labor Cost ? General Manufacturing。 Supplier / Estimator Feedback Activity Based Costing LABOR DIRECT LABOR 12 Activity Based Costing LABOR INDIRECT LABOR ? Personnel not directly associated with manufacturing process Such as。 – Employment amp。 Plastics Textiles Fabrication Automotiv