If a plant produces one product with simple, uncomplicated equipment and there are few changes in the cost of production, current accounting methods may be sufficient to determine actual product cost per unit of production (gallon, liter, barrel, pound, Kilogram, ton etc.)
Seldom is life so simple. Each product produced can have its own cost structure. Feedstocks change, energy cost and consumption change, facilities used change, set-ups change, Machinery systems change. Today's capital intensive facilities are complex structures of systems with systems within systems. This all tends to obscure the true cost of process.
Exisiting systems of historic accounting and cost accounting all have their purpose. Each with their own strengths and weaknesses in reporting on product costs. Often these system produce less than true cost of a process.
Our speciality is producing costs using Dynamic Life Cycle Cost Methods that have been shown to produce better, more accurate cost of a process. These methods calculate true machine and system costs taking into account high wear items and long term investment facility and machine costs, operatiing costs including all maintenace both planned and non-planned.
If you want to know your true product cost, contact us today.