Average Production Cost of Each Component using Individual Costs Solution

STEP 0: Pre-Calculation Summary
Formula Used
Production Cost of Each Component = (Total Non-Productive Cost+Total Machining And Operating Cost+Total Tool Changing Cost+Total Cost of Tools Used)/Batch Size
Cpr = (TNPC+Cm+TCC+TTC)/Nb
This formula uses 6 Variables
Variables Used
Production Cost of Each Component - Production Cost of Each Component is the total amount that it takes to produce a single component from scratch.
Total Non-Productive Cost - Total Non-Productive Cost is the amount spent on activities that do not result in any productivity or profit to the plant during the manufacturing of a batch of components.
Total Machining And Operating Cost - Total Machining And Operating Cost is the total amount of money required to machine a given batch of product.
Total Tool Changing Cost - Total Tool Changing Cost is the total cost that arises due to the time taken by the operator in changing the Cutting Tool when he is paid by the hour.
Total Cost of Tools Used - Total Cost of Tools Used is the sum of the amount of all tools that have been used for production.
Batch Size - Batch Size is the count of similar kinds of products to be manufactured.
STEP 1: Convert Input(s) to Base Unit
Total Non-Productive Cost: 10 --> No Conversion Required
Total Machining And Operating Cost: 100 --> No Conversion Required
Total Tool Changing Cost: 540 --> No Conversion Required
Total Cost of Tools Used: 1000 --> No Conversion Required
Batch Size: 2 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
Cpr = (TNPC+Cm+TCC+TTC)/Nb --> (10+100+540+1000)/2
Evaluating ... ...
Cpr = 825
STEP 3: Convert Result to Output's Unit
825 --> No Conversion Required
FINAL ANSWER
825 <-- Production Cost of Each Component
(Calculation completed in 00.004 seconds)

Credits

Created by Kumar Siddhant
Indian Institute of Information Technology, Design and Manufacturing (IIITDM), Jabalpur
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Verified by Parul Keshav
National Institute of Technology (NIT), Srinagar
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6 Production Cost Calculators

Average Production Cost of each component
Go Production Cost of Each Component = Cost of a Tool*(Setup Time+Machining Time)+(Number of Tools Used/Batch Size)*((Cost of a Tool*Tool Changing Time)+Cost of a Tool)
Total Production Cost
Go Total Production Cost = Batch Size*(Cost of a Tool*(Setup Time+Machining Time)+(Number of Tools Used)*((Cost of a Tool*Time to Change One Tool)+Cost of a Tool))
Average Production Cost of Each Component using Individual Costs
Go Production Cost of Each Component = (Total Non-Productive Cost+Total Machining And Operating Cost+Total Tool Changing Cost+Total Cost of Tools Used)/Batch Size
Total Production Cost given Individual Costs
Go Total Production Cost = Total Non-Productive Cost+Total Machining And Operating Cost+Total Tool Changing Cost+Total Cost of Tools Used
Average Production Cost of each Component given Total Production Cost
Go Production Cost of Each Component = Total Production Cost/Batch Size
Total Production Cost for given Batch Size
Go Total Production Cost = Batch Size*Production Cost of Each Component

Average Production Cost of Each Component using Individual Costs Formula

Production Cost of Each Component = (Total Non-Productive Cost+Total Machining And Operating Cost+Total Tool Changing Cost+Total Cost of Tools Used)/Batch Size
Cpr = (TNPC+Cm+TCC+TTC)/Nb

Average Production Cost of each component

The average Production Cost of each component is usually determined by taking an average over a defined batch of products. The reason for this is the extended costs such as the cost of tools and operating costs etc. This makes the Average Production Cost becomes quite higher for a single product than when measured over batch size.

How to Calculate Average Production Cost of Each Component using Individual Costs?

Average Production Cost of Each Component using Individual Costs calculator uses Production Cost of Each Component = (Total Non-Productive Cost+Total Machining And Operating Cost+Total Tool Changing Cost+Total Cost of Tools Used)/Batch Size to calculate the Production Cost of Each Component, The Average Production Cost of Each Component using Individual Costs is a method to determine the average cost it takes to produce a single product taken from a given batch of products when all estimated individual costs are known. Production Cost of Each Component is denoted by Cpr symbol.

How to calculate Average Production Cost of Each Component using Individual Costs using this online calculator? To use this online calculator for Average Production Cost of Each Component using Individual Costs, enter Total Non-Productive Cost (TNPC), Total Machining And Operating Cost (Cm), Total Tool Changing Cost (TCC), Total Cost of Tools Used (TTC) & Batch Size (Nb) and hit the calculate button. Here is how the Average Production Cost of Each Component using Individual Costs calculation can be explained with given input values -> 825 = (10+100+540+1000)/2.

FAQ

What is Average Production Cost of Each Component using Individual Costs?
The Average Production Cost of Each Component using Individual Costs is a method to determine the average cost it takes to produce a single product taken from a given batch of products when all estimated individual costs are known and is represented as Cpr = (TNPC+Cm+TCC+TTC)/Nb or Production Cost of Each Component = (Total Non-Productive Cost+Total Machining And Operating Cost+Total Tool Changing Cost+Total Cost of Tools Used)/Batch Size. Total Non-Productive Cost is the amount spent on activities that do not result in any productivity or profit to the plant during the manufacturing of a batch of components, Total Machining And Operating Cost is the total amount of money required to machine a given batch of product, Total Tool Changing Cost is the total cost that arises due to the time taken by the operator in changing the Cutting Tool when he is paid by the hour, Total Cost of Tools Used is the sum of the amount of all tools that have been used for production & Batch Size is the count of similar kinds of products to be manufactured.
How to calculate Average Production Cost of Each Component using Individual Costs?
The Average Production Cost of Each Component using Individual Costs is a method to determine the average cost it takes to produce a single product taken from a given batch of products when all estimated individual costs are known is calculated using Production Cost of Each Component = (Total Non-Productive Cost+Total Machining And Operating Cost+Total Tool Changing Cost+Total Cost of Tools Used)/Batch Size. To calculate Average Production Cost of Each Component using Individual Costs, you need Total Non-Productive Cost (TNPC), Total Machining And Operating Cost (Cm), Total Tool Changing Cost (TCC), Total Cost of Tools Used (TTC) & Batch Size (Nb). With our tool, you need to enter the respective value for Total Non-Productive Cost, Total Machining And Operating Cost, Total Tool Changing Cost, Total Cost of Tools Used & Batch Size and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
How many ways are there to calculate Production Cost of Each Component?
In this formula, Production Cost of Each Component uses Total Non-Productive Cost, Total Machining And Operating Cost, Total Tool Changing Cost, Total Cost of Tools Used & Batch Size. We can use 2 other way(s) to calculate the same, which is/are as follows -
  • Production Cost of Each Component = Cost of a Tool*(Setup Time+Machining Time)+(Number of Tools Used/Batch Size)*((Cost of a Tool*Tool Changing Time)+Cost of a Tool)
  • Production Cost of Each Component = Total Production Cost/Batch Size
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