Die kosteanalise van elektrode-vervaardiging by E.M.S.A. : 'n gevallestudie

Abstract

In this case study the system of cost analysis in a graphite electrode manufacturing concern is described and analised, and recommendations made, where necessary, to improve the system.

The fundamental problem in the existing system is that the system of cost analysis does not serve its main purpose of providing sufficient data for effective management. The problem is twofold, namely a lack of variance analysis and a lack of cost information for the different product variations. In order to install a cost system facilitating variance analysis, a reclassification of standard costs into their basic components of material, labour and overheads will be essential. Presently standard costs are split into fixed and variable costs. Of prime importance is also an expansion of the various standards in order to determine standard and actual manufacturing costs for the various sizes of electrodes being manufactured. This cost information is essential for management decisions regarding selling prices and the sales mix. Furthermore it is also recommended that two distinct operations in the production process be separated for cost purposes. This will significantly enhance control by management, especially when combined with variance analysis. It is concluded that the shortcomings of the present system arised through the growth of the company in recent years. This growth in the scale of production was not followed by improvements in the cost system to cope with the increased reliance of management on cost data for control purposes. This has now become crucial in order to enable management to control production efficiency.