Applying cost accounting to factory automation

Article Abstract:

A cost accounting survey of 85 Fortune 500 corporate controllers reveals that US manufacturing companies find it difficult to quantify the benefits received from automation equipment. The survey covers factory automation in the respondent's firm, investment justification, product costing, and performance measuring. Better efforts are needed to quantify intangible benefits and costs in order to improve accounting practices related to automation. Companies should use machine-based overhead rates instead of labor-based rates in product costing. Performance measures in environments that are automated need to focus on quality, material, control, inventory, and machine performance. US manufacturing firms should have a better chance to compete in world marketplaces if cost accounting practices relating to factory automation are improved.

Usage, Innovations, Automation, Cost accounting

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Changing performance measures at Caterpillar

Article Abstract:

The Wheel Loaders and Excavators Div. (WLED) of Caterpillar Inc. is benefiting from initiatives that transformed both its organizational structure and performance measures. In the past, the division functioned as a cost center which concerned itself with cost reduction of product design and manufacture. It is now a profit center, which focuses on satisfying the needs of the customers involved in the product line with the help of empowered employees. In line with this organizational change, WLED adopted new performance measures that included not just financial measures but also nonfinancial measures and service department measures. The results of all this maneuvering are improved customer service and productivity, greater income and employees who can make better decisions by themselves.

Construction machinery, Wheeled Loaders, Construction Machinery Manufacturing, Excavators, Performance, Case studies, Measurement, Accounting and auditing, Industrial efficiency, Economic efficiency, Caterpillar Inc., CAT, Organizational change, Construction equipment industry, Excavating machinery

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Accountants overseas

Article Abstract:

The experience of Caterpillar Inc clearly manifests the benefits of sending management accountants and financial managers abroad to serve as business advisors. Overseas business trips allow accountants and financial managers in staff or supervisory-level positions to provide valuable on-site assistance and expertise during critical negotiations while gaining more knowledge and experience that can improve their performance and boost their careers. Companies, however, should justify these kinds of trips by taking various factors into consideration such as the opportunity to leverage the trip, the timing or ability of the accountants and financial managers to be away from the office and the cost of the trip. Ensuring the success of the trip requires adequate planning and preparation.

Accounting, auditing, & bookkeeping, Accounting & Auditing Services, Accounting, Tax Preparation, Bookkeeping, and Payroll Services, Financial Personnel, Planning, Accountants, Business travel, Financial planners, Travel, Financial occupations

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