Introduction:
In the manufacturing industry, mold costs are an important factor in the production process. The cost of molds needs to be shared among different departments or products, which is called mold fee allocation. In this article, we will explore some related vocabulary about mold fee allocation.
1. Mold fee allocation
Mold fee allocation refers to the practice of dividing the cost of molds among different departments or products. This is usually done based on the usage of each department or product. The main purpose of mold fee allocation is to ensure that each department or product bears a fair share of the mold cost.
2. Cost center
A cost center is a department or unit within a company that incurs expenses. In the context of mold fee allocation, each department or product can be considered as a cost center. The mold fee can be allocated to each cost center based on its usage.
3. Usage rate
Usage rate refers to the percentage of time that a department or product uses a mold. For example, if a department uses a mold for 50% of the time, then it should bear 50% of the mold cost. Usage rate is an important factor in mold fee allocation.
4. Allocation method
There are different methods for mold fee allocation, such as direct allocation, step-down allocation, and reciprocal allocation. Direct allocation is the simplest method, where the mold cost is directly allocated to each cost center based on its usage. Step-down allocation and reciprocal allocation are more complex methods that take into account the interdependence between cost centers.
Conclusion:
Mold fee allocation is an important practice in the manufacturing industry. It ensures that each department or product bears a fair share of the mold cost. Cost center, usage rate, and allocation method are some of the key concepts related to mold fee allocation. By understanding these concepts, companies can effectively allocate their mold costs and optimize their production processes.