Production Costing Project

Production Costing Project

The Case

Industry in Packaging materials wants to acquire a more efficient costing methodology.

The Challenge

Following a detailed analysis of the company’s needs and several discussions with the key stakeholders, LPS and the team identified the following issues:

  • Inability with existing methods to allocate indirect and labor costs to company’s cost centers.
  • Estimation of the indirect costs as a percentage of sales.
  • Absence of Strategic Cost Control.

The Steps

LPS, utilizing international practices and tools :

  • Developed a costing software which is capable of allocating direct and standards costs into the right cost centers.
  • Allocated and categorized Indirect costs per product.
  • Developed a software for ”Dynamic Costing.”

The Results

LPS and the team implemented the proposal and:

  • Achieved successful Costing Analysis per product and category
  • Ability of using “Dynamic Costing” for strategic cost control