Factors that Affect SMMs’ Ability to Develop Direct Costs
There are several factors affecting SMMs’ inclination to have and use reliable cost data, including the size of company (smaller firms tend to have fewer resources), type of company (job shop versus product), type of product (simple versus complex), and unit production versus processing production. Questionnaire data showed that 11% of Type 1 companies reported having actual material and labor costs compared with about 40% for Types 2 and 3 firms. Nearly 40% of Types 2 and 3 job shops reported having material and labor costs compared with about 30% for Types 2 and 3 product companies.
Simple products (jobs or work orders for job shops and machine companies) obviously present less of a ...
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