Cost Finding and control for Flexible Manufacturing Systems

The use of robots to supplant direct labor, automated materials handling, computer controlled flexible manufacturing systems which are capable of producing a number of products within the same product line, and just‐in‐time production and distribution are creating a new manufacturing environment. As in the past, the need for assignment and control of direct material costs remains; however, the allocation and control of conversion costs can no longer be based on direct labor hours or labor costs. Further, since different products are produced in the same assembly line, the allocation and control of conversion costs, based on the materials used or units produced, is not possible. A machine cost per minute is, therefore, developed in order to allocate conversion costs to products and effectuate control over such costs.