Activity-Based Cost Estimation Model for Foundry Systems Producing Steel Castings

摘要

Attention in this work is directed to estimate the manufacturing costs by using Activity-Based Costing (ABC) method for the castings that are produced by steel foundry. ABC is a cost accounting method that can overcome many of the limitations of Traditional Cost Accounting (TCA) methods. Cost rates for each department in the foundry are estimated by engineering procedures. Consequently, cost- estimating relationship model that mathematically describes the cost of final castings as a function of all consumable resources is constructed. A Work-In-Process (WIP) flow through the different production centers is analyzed and costs of available resources are allocated for all foundry centers, cost rates are derived, accordingly the ABC method for estimating production cost is discussed and presented. Comparison between the results of ABC method and the results of TCA method has been carried out. Finally results are discussed, recommendations are presented, and avenues for related future works are proposed.