Manufacturing cost variance analysis

Actual Costing & Variance Analysis

The analysis of the variances between actual production costs and standard and budget costs enable Manufacturing Companies to empirically validate their cost models and identify where business improvements can be made on the basis of actual data. SBM's Actual Costing and Variance Analysis components provide a Performance Management tool that will enable you to:-

Analyse operational performance as well as costs and profitability. ........... .......... By using a 'cost-pull' quantity based approach to product costing that separates consumption from value, SBM's costing structure means that you can analyse your company's operational performance as well as costs.

Analyse Variances over time. ................... ........................... ......................... .................... By automatically recording costs as they are calculated, SBM: Cost Management Solutions provide you with a comprehensive history of how your costs change over time. By enabling you to analyse cost and consumption data over any combination of daily, weekly or monthly analysis periods it provides a valuable source of cost data that enables you to fully understand the performance of your business.

Use data imported from other company systems. ......................... .............. .............. The price and consumption data needed for the analysis can be imported from spreadsheets, your company's ERP and process control systems or entered manually in data tables that you pre format to meet your needs.

Monitor the use of activities and resources. ....................... ................... ............... Excess and idle capacity is clearly identified and reported as a variance and not allocated automatically to individual product costs. Instead, the attribution of the cost of unused activities and resources is a separate costing and analysis procedure that enables you to see precisely how your product costs change when costs are fully absorbed.

Compare Standard, Actual and Budget Costs between plants and departments. .. By establishing budget, standard and actual consumption and cost data, SBM's Variance Analysis components enable you to carry out sophisticated analyses. Because the system understands the business logic of how your products are made, you can undertake Variance Analyses at each stage of the manufacturing process and examine activity, resource and materials consumption, price, mix and yield variances in detail. You can examine costs at the local and divisional level, compare the productivity and profitability of different manufacturing locations and examine your production mix and its impact on profitability.