Cost Reduction in Manufacturing Packaging for High Tech Equipment and Mechanical Assembly

Financial Accounting:

In depth financial accounting contains some principles, Concepts ; Equation.

Financial statements must be prepared according to the (I FRS) International Financial Reporting Standards.

Accounting Cycle:

2. General Journal. 3. General Ledger. 4. Cash Book. 6. Trading profit ; Loss Account. 7. Balance Sheet. Cash Flow Statement.

Cost Accounting:

Cost accounting ascertains budget and actual cost of production, operations, departments, process and the analysis of variance. Cost accounting is used to support decision-making to reduce cost of organization and improve its profitability. • Standard Cost Accounting. • Resource Consumption Accounting.

Three Classical Cost Elements:

• Raw Material.

Cost Accounting is being used to help the managers to understand ; reduce the running cost of an Organization. Most of Cost varied with the rate of production which is called "Variable Cost" like money spent on labor, power to run a factory, direct material etc.

In cost accounting some statements are prepare. Majors are Income Statement, Cost of Goods Sold Statement, and Cost of Production Report.

(CGS) Cost of Goods Sold Statement:

Cost of Goods sold statement is prepared to drive the total cost which is spent on the purchasing to sell the produced Goods. The remaining amount is called "Cost of Material Consumed". Then the cost of Labor and (FOH) Factory Overhead added in cost of material consumed. The total of this is called "Total Factory Cost" after that Opening stock of work in process is added and closing stock of work in process is deducted from Total Factory Cost. The amount which drives after this is called "Cost of Goods Manufactured".

(Direct Material + Direct Labor= Prime Cost) (Labor + FOH= Conversion Cost)

Financial Accounting Versus Cost Accounting

Use a bent sheet metal technology, which is more time consuming to engineer and therefore more expensive in the developing stage or use metal tubing for a less expensive and quicker design but with higher manufacturing cost of the final product. Avoiding welding can significantly reduce the cost of the product.

Welding extensive designs

Avoiding welding – cost benefits

This contributes to higher cost of production.

Advanced designs tend to utilize the advantages of sheet metal formings (achieved by punching machines) in joining parts, versus bending, welding and inserting screws, which are relatively lengthy hand operations.

The conditions and the requirements to achieve cost reduction process:

3. The institution of the cost reduction process as early as possible. In the case that the cost reduction initiator is already the contract manufacturer, the ; benefits of the cost reduction can be shared between the manufacturer and the ; customer.

If the conditions mentioned above are fulfilled, the cost reduction process will be successful.