Unique costing for make-to-order manufacturers

In make-to-order manufacturing, cost unit accounting prompted by order costing is only concluded when the underlying order has been completed and all costs have been calculated and made available. Consequently, Costing relies on controlling that is parallel and in accompaniment to the project duration. This is also known as simultaneous costing, which has as its highest task to register when a project exceeds its budget capacity with the sensitivity and accuracy of a seismometer. The budget itself is determined by a comparison of current requirements with the experiential values of concluded projects. As concluded projects are never entirely identical to new assignments, such budget statistics can only be approximate values. The primary task of simultaneous costing, therefore, is to check these approximate values with the actual work and material costs incurred. Considering the substantial complexity of mechanical and plant engineering projects, simultaneous costing cannot be carried out manually. To ensure that the required data is provided promptly and can be processed in a cost-effective manner, costing should be embedded in a Project-oriented ERP system that feeds work and material costs in to controlling automatically. This provides make-to-order manufacturers with instant transparency as to whether current projects are economically viable. Consolidation of all project data also provides insight into the cost efficiency of the company as a whole. An analysis spectrum from business area through department to individual work Processes is sufficient.