Nobody downloaded yet

Car Manufacturing and Costing Systems - Essay Example

Comments (0) Cite this document
In the year 2000 manufacturing processes in most industries had become computerized. Mass production was no longer the order of the day. Cars are now produced using a just-in-time system in many factories and labour performs a more or less supervisory role.
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.7% of users find it useful
Car Manufacturing and Costing Systems
Read TextPreview

Extract of sample "Car Manufacturing and Costing Systems"

Download file to see previous pages Meanwhile, by 1939, the UK car manufacturing Industries have reached to the extent where they seconded the United State worldwide in terms of manufacturing car, as there were 20 Independent car manufacturing companies based in UK.
Additionally, according to Stephen King (2005) that "BEFORE THE Second World War, there were hundreds of UK car companies. Had you wanted to buy a car, you could have opted, in the 1930s, for an elegant Alvis. Going back a bit further, you might have preferred the rather underrated, yet classy, Albion. Now, with the administrators called in to sort out MG Rover, it looks increasingly likely that you will no longer be able to 'Buy British' at all unless you're heading for the niche world of Morgan or for self-employment as a taxi driver".
The costing system that was used in most manufacturing companies in the 1930s was the volume based costing system. This therefore implies that this costing system must have been employed in the car manufacturing process in the United Kingdom during this period.
A volume-based costing system is a costing system that assigns overheads to products based on the output level achieved. (Blocher et al, 2005). Overhead or indirect costs are arbitrarily assigned to products based on either labour or machine hours rather than based on the product's demand for activities and thus resources. (Blocher et al).
A vA volume based costing system allocates costs to products using arbitrary methods such as direct labour hours. These systems have proven to be appropriate when manufacturing systems used to be labour intensive, when labour used to be the principal value-adding activity in the raw material conversion process. (Cooper and Kaplan, 1992). However, with the advent of sophisticated technological developments and automation of manufacturing processes, direct labour is no longer directly working in the conversion of materials to products. Instead labour is simply engaged in setting up machines and supervising production activities (Kaplan and Cooper, 1992).
Under the volume based costing system products that are manufactured in low quantities tend to incur more costs than those that are produced in large batches. The costs incurred per unit on these low-volume products are usually higher than that for the high-volume products. (Kaplan and Cooper, 1992). Therefore, when a volume based costing system is used to allocate overhead costs to products both low- and high-volume products are allocated equal amounts of costs. (Kaplan and Cooper, 1992).
Activity based costing (ABC) a cost accounting system that recognizes the fact that costs are incurred by each activity that takes place within the organization and that products (or customers) should bear costs in proportion to their demand for activities (Owe and Law, 1999) is the costing system that was used in the UK car manufacturing industry in the year 2000. This is so because car manufacturing in the year 2000 became computerised and the role of labour in manufacturing was mainly supervisory. Apportioning overheads using labour or machine hours while appropriate in the 1930s could not be appropriate in 2000. ABC was proposed by Professor Johnson ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Car Manufacturing and Costing Systems Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
Car Manufacturing and Costing Systems Essay Example | Topics and Well Written Essays - 750 words. Retrieved from
(Car Manufacturing and Costing Systems Essay Example | Topics and Well Written Essays - 750 Words)
Car Manufacturing and Costing Systems Essay Example | Topics and Well Written Essays - 750 Words.
“Car Manufacturing and Costing Systems Essay Example | Topics and Well Written Essays - 750 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Car Manufacturing and Costing Systems

Outsourcing Policies On German Car Manufacturing Industry

.... The automobile industry has not been exempted to this as German and American auto manufacturers face competition from Japanese cars. This has called for much cost-cutting on the part of the former. Total quality management, defined as "set of management practices throughout the organization, geared to ensure the organization consistently meets or exceeds customer requirements" is now being applied by various organizations to meet the demand for low-cost products such as autos (Authenticity Consulting, LLC). German car manufacturers achieve cost-cutting through sub-contracting and outsourcing. How the process of...
26 Pages(6500 words)Research Paper

Multinational Car Manufacturing

...SETTING UP OF BMW CAR MANUFACTURING UNIT IN ICELAND Bevarian Motor work (B.M.W) as the abbreviation stands which is German company based in Munich. Bevarian motor works is an English translation from German language. It is Ayerische motoren werke which we now call as B.M.W. B.M.W. is the leading auto exporter of automobiles. The company Standard in 1913 by a Beverian Karl Rapp started an air craft engine shop is Munich. After four years Rapp designed the company led by Franz-josef popp changed its name to Buyerische motoren works. The company has to take a major set back when the 1919 treaty of Versailles took a decision prohibiting German companies producing aircraft engines and aircraft. Due to the company started manufacturing... ...
10 Pages(2500 words)Assignment

Manufacturing process of a car dashboard

...process. These are not to be neglected as they assist in the formation and substituting to different types of material to more convenient materials that can withstand the demand made on today's dashboard. It is also clear that since the dashboard houses so many essential car functioning components the design therefore will also play an important and vital part. By thinking in terms of appropriate geometrical shapes, effective material that will become an essential part of the car one will more be more able to design and manufacture a dashboard with relative ease and very few industrial hiccups. The dashboard prides itself in offering housing for the interior electrical components like...
7 Pages(1750 words)Essay

Manufacturing Systems Theory

..., this department employs vendor management system in order to maximize its value to the firm by dealing and controlling with suppliers. Just-in-time management system is also utilized in-order to manage inventory and minimize costs. The transformation process is the process of converting input materials into finish products and services needed by the customers. It has several subsystems that work hand-in-hand, with overlapping functions and continuous roles. These subsystems are planning, sourcing, manufacturing and logistics. The transformation process involves different systems in manufacturing. The component...
3 Pages(750 words)Lab Report

Car Manufacturing Units of Australia and Japan

...a continuous evolution in the Japan's car industry through its advancement of motorisation and its growth, multiphase globalisation along with its interdependence with the rest of world. The automobiles have also changed the lifestyle and culture of Japan. It has also created a variety of related industries for servicing and manufacturing motor vehicles. This way, automobile production has grown to be one of the leading industries in Japan. (Japan's Auto Industry - An Overview, n.d.) Japan also introduced TQC and JIT system in order to increase its productivity. Along with the automated production technology and reorganisation of office, 'kanban system' was also...
8 Pages(2000 words)Essay

Choice Costing Systems

...that there is a change in the production output volume in either an increase or a reduction depending on the raw materials’ volume purchased. Their job order costing system involved considering the labor costs, manufacturing overhead costs and the nonmanufacturing costs. However, though Dream Chocolate Company has been using the pricing strategies, it is hard for them to accurately estimate the cost of an order to be able to price it effectively. I think this has been contributed by its inadequate following and recording of the costs in its stages of production. This makes the company not to be...
3 Pages(750 words)Assignment

Materials&Manufacturing Report (( car body pressing ))

...Car Body Pressing Introduction In recent times, competition is increasingly growing to create demand in the automotive industryhence the need for unit cost reductions and productivity improvements. This has led to changes in operation strategies amongst production managers hence for a model of car in house a production of 40-50 critical panels requiring 100-150 dies is made. Car body pressing involves converting the sheet metals to body panels bearing high dimensional accuracy and consistency. This process brings forth the formation of; doors, sides, roof, and floor parts of the vehicle which would later undergo welding. In the car press division, the...
8 Pages(2000 words)Essay

Manufacturing Systems and Quality

...the principles associated with the manufacturing process. For instance understanding the concepts of lean manufacturing, “just in time” manufacturing, total quality management and total productive maintenance are some of the management concepts that serve to be very useful in developing efficient mechanisms for the modern manufacturing systems. The text discusses how this concepts have been used in modern industrial practice to run industrial systems for best efficiency and production with minimal cost. Most manufacturing companies have the goal of trying to ensure that they produce the best products...
9 Pages(2250 words)Coursework

Manufacturing Systems and Quality

...and removing wasteful procedures that do not add any value to the output product. There is no need to minimize quality with the lean manufacturing techniques– the cuts are due to the result of achieving better and more efficient means of accomplishing the same function. To achieve the efficiencies, the lean manufacturing uses a customer-value focus. This approach focusses on the price the customer is willing to pay for a particular product. The customers only pay when their needs are met. They should not pay for faulty products, or for the additional costs of having large inventories. The customer should not pay for the company’s wastes. A waste is defined as anything that adds no value...
14 Pages(3500 words)Coursework

Change & Innovation in Car Manufacturing

...Change & Innovation in Car Manufacturing Introduction Innovation is the introduced novelty that provides high-quality growth of efficiency of production processes demanded by the market. It is the end result of the intellectual activity of a person, the imagination, creative process, opening, inventions and rationalization. A perfect example of innovation is launching goods and services with new consumer properties or increasing production systems efficiency. Innovation prescribes the development of the new production line (the set of contracts for sale of a product and supply with purchased resources, and also necessary materials and intangible assets) founded on specially developed...
10 Pages(2500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Car Manufacturing and Costing Systems for FREE!

Contact Us