Manufacturing and Product Cost Factors
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Questions and Answers

What is the formula to calculate the cost of one set of tooling (C1)?

  • $Ct * nt / N
  • $Ct * N / nt
  • $Ct / N (correct)
  • $Ct / nt

    • What is the assumption for tooling in the calculation of C1?

  • Tooling can be used for multiple projects
  • Tooling is dedicated to the project
  • Tooling can be used in series or parallel operations
  • Both A and B (correct)

    • What is the purpose of Mold Classification by Lifetime?

  • To classify the quality and lifetime of molds (correct)
  • To calculate the cost of one set of tooling
  • To forecast the total production volume
  • To determine the number of parts each tool set can make

    • What is the symbol 'N' represents in the formula for C1?

    <p>Total forecast production volume</p> Signup and view all the answers

    What is the purpose of rounding up the result of C1 to the nearest integer?

    <p>To ensure the result is a whole number</p> Signup and view all the answers

    What is the symbol 'nt' represents in the formula for C1?

    <p>Number of parts each tool set can make before wearing out</p> Signup and view all the answers

    What is the unit of measurement for 'Ct'?

    <p>Dollars per tool</p> Signup and view all the answers

    What is the purpose of using the Society of Plastics Industry (SPI) classification system?

    <p>To classify the quality and lifetime of molds</p> Signup and view all the answers

    What is the assumption for the calculation of C1 regarding tooling?

    <p>Tooling is dedicated to the project</p> Signup and view all the answers

    What is the primary factor that determines the perceived value of a product to customers?

    <p>Brand equity</p> Signup and view all the answers

    Which of the following is NOT a contributor to overhead cost in manufacturing?

    <p>Labor</p> Signup and view all the answers

    What is the formula for calculating the total cost of making a part?

    <p>C = F + V*N</p> Signup and view all the answers

    What is the primary purpose of cost prediction in manufacturing?

    <p>To determine the cost of production</p> Signup and view all the answers

    Which of the following is an example of a variable cost in manufacturing?

    <p>Material cost</p> Signup and view all the answers

    What is the term for the maximum price that customers are willing to pay for a product?

    <p>Cost ceiling</p> Signup and view all the answers

    What is the primary difference between manufacturing cost and product cost?

    <p>Manufacturing cost is the cost of production, while product cost is the cost of the product</p> Signup and view all the answers

    What is the term for the process of calculating the total cost of making a part?

    <p>Cost computation</p> Signup and view all the answers

    Which of the following is NOT a factor that affects the cost of manufacturing a product?

    <p>Product design</p> Signup and view all the answers

    Study Notes

    Manufacturing and Product Cost

    • Manufacturing cost is affected by various factors, including material cost, equipment cost, tooling, labor, and overhead.
    • Overhead costs include energy, equipment maintenance, and facilities upkeep.

    Cost Ceiling Factors

    • Perceived value of the product to customers affects the cost ceiling.
    • Size of the market, competition, and brand equity also influence the cost ceiling.

    Elements of Manufacturing Cost

    • Material cost is a contributor to manufacturing cost.
    • Equipment cost is another factor that affects manufacturing cost.
    • Tooling, labor, and overhead costs also contribute to the overall manufacturing cost.

    Total Cost of Making a Part (Ashby's Model)

    • The total cost of making a part is the sum of fixed and variable costs.
    • The cost equation is: 𝐶 = 𝐹 + 𝑉∗𝑁, where 𝐶 is the total cost, 𝐹 is the fixed cost, 𝑉 is the variable cost, and 𝑁 is the production quantity.

    Cost Computation

    • Fixed cost (F) and variable cost (V) are used to calculate the total cost (C).
    • The cost per unit is calculated by dividing the total cost by the production quantity (N).

    Tooling Cost

    • The tooling cost equation is: 𝐶1 = 𝐶𝑡 ∗ 𝑅𝑜𝑢𝑛𝑑𝑢𝑝 (𝑁 / 𝑛𝑡), where 𝐶1 is the tooling cost, 𝐶𝑡 is the cost of one set of tooling, 𝑁 is the total forecast production volume, and 𝑛𝑡 is the number of parts each tool set can make before wearing out.
    • Tooling cost is affected by the production volume and the number of parts each tool set can make before wearing out.

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    Description

    This quiz covers the factors affecting the cost of manufacturing processes and products, including cost prediction and its relation to company profit.

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