Improve Traceability, Yield, Compliance

Activity-Based Costing Software

Part of a Modular Continuous-Improvement Solution for Food Manufacturing

 

ABC Process Costing Case Study
 

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Activity-Based Costing

CAT Squared’s Activity-Based Costing (ABC) Software Module provides actual month-to-month costs, empowering management to adapt to changing conditions by adjusting prices, manufacturing mix, product selection, and other necessary changes.

ABC assigns costs to each activity in the manufacturing process, providing management with a step-by-step view of how costs accumulate as products move through the plant, enabling plant and financial managers to understand the cost of every activity, process step, and all other components of a product’s cost.

CAT Squared’s costing solution provides a financial perspective on process yields and all production losses and helping production and finance managers “talk the same language” while working together to create continuous improvement, increase productivity and profitability.

A full supply chain cost analysis can also be done to provide insight into logistics costs and to measure profitability by customer and by products enabling better pricing and competitiveness.

The system is auditable with complete traceability of costs from product back to all inputs.

Benefits

  • Provides regular costing updates
  • Shows profit or loss for every product line
  • Makes it easy to run alternative (what-if) scenarios if meat or packing costs change suddenly
  • Provides a complete view of inter-organizational and overhead charges
  • Shows waste otherwise hidden in the production figures
  • Identifies products and customers that add or destroy value by incorporating cost-of-capital into costing
  • Simplifies critical financial decisions by providing a clear picture of all fixed and variable costs

Features

  • Follows the product step-by-step thru the production process, making it easy to understand how costs accumulate
  • Converts yield losses and gains into monetary values, making it clear what the cost of these losses may be
  • Provides inventory, WIP and COGS results for input into financial systems
  • Uses all production data from CAT Squared, helping to ensure the integrity of production data, highlighting gaps
  • Uses matrix algebra to solve costing accurately and efficiently
  • Links staff and equipment resources to activities and costs, helping to understand resource usage
  • Exports to Excel for further analysis