Machining and Operating Cost of Each Product using Average Production Cost Solution

STEP 0: Pre-Calculation Summary
Formula Used
Machining and Operating Cost of Each Product = Production Cost of Each Component-(Cost of a Tool*Setup Time+(Number of Tools Used/Batch Size)*((Cost of a Tool*Time to Change One Tool) +Cost of a Tool))
Cm1 = Cpr-(Ct*ts+(Nt/Nb)*((Ct*tc) +Ct))
This formula uses 7 Variables
Variables Used
Machining and Operating Cost of Each Product - Machining and Operating Cost of Each Product is the total amount of money required to machine a single product.
Production Cost of Each Component - Production Cost of Each Component is the total amount that it takes to produce a single component from scratch.
Cost of a Tool - The Cost of a Tool is simply the cost of one tool being used for machining.
Setup Time - (Measured in Second) - Setup Time of each component is the time required to load/unload the workpiece and position the tool for production for one component.
Number of Tools Used - The Number of Tools Used is the total number of tools used for manufacturing a batch of products.
Batch Size - Batch Size is the count of similar kinds of products to be manufactured.
Time to Change One Tool - (Measured in Second) - Time to Change One Tool is the measure of time it takes to change one tool during machining.
STEP 1: Convert Input(s) to Base Unit
Production Cost of Each Component: 15000 --> No Conversion Required
Cost of a Tool: 80 --> No Conversion Required
Setup Time: 0.9 Minute --> 54 Second (Check conversion here)
Number of Tools Used: 3 --> No Conversion Required
Batch Size: 2 --> No Conversion Required
Time to Change One Tool: 0.5 Minute --> 30 Second (Check conversion here)
STEP 2: Evaluate Formula
Substituting Input Values in Formula
Cm1 = Cpr-(Ct*ts+(Nt/Nb)*((Ct*tc) +Ct)) --> 15000-(80*54+(3/2)*((80*30) +80))
Evaluating ... ...
Cm1 = 6960
STEP 3: Convert Result to Output's Unit
6960 --> No Conversion Required
FINAL ANSWER
6960 <-- Machining and Operating Cost of Each Product
(Calculation completed in 00.004 seconds)

Credits

Created by Kumar Siddhant
Indian Institute of Information Technology, Design and Manufacturing (IIITDM), Jabalpur
Kumar Siddhant has created this Calculator and 400+ more calculators!
Verified by Parul Keshav
National Institute of Technology (NIT), Srinagar
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6 Machining And Operating Cost Calculators

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

Machining and Operating Cost of Each Product using Average Production Cost Formula

Machining and Operating Cost of Each Product = Production Cost of Each Component-(Cost of a Tool*Setup Time+(Number of Tools Used/Batch Size)*((Cost of a Tool*Time to Change One Tool) +Cost of a Tool))
Cm1 = Cpr-(Ct*ts+(Nt/Nb)*((Ct*tc) +Ct))

Significance of Machining and Operating Costs

The Machining and Operating Cost basically helps in determining the count of components that can be manufactured in the given resources. If this calculated cost is lower than the actual cost based on machining time, it means that the production planning has failed, as the total number of the components that are to be produced becomes lower than the starting batch size.

How to Calculate Machining and Operating Cost of Each Product using Average Production Cost?

Machining and Operating Cost of Each Product using Average Production Cost calculator uses Machining and Operating Cost of Each Product = Production Cost of Each Component-(Cost of a Tool*Setup Time+(Number of Tools Used/Batch Size)*((Cost of a Tool*Time to Change One Tool) +Cost of a Tool)) to calculate the Machining and Operating Cost of Each Product, The Machining and Operating Cost of each product using Average Production Cost is a method to determine the capital that must be invested for machining and operating processes to be afforded on a single product based on the average expense it took to manufacture a single component. Machining and Operating Cost of Each Product is denoted by Cm1 symbol.

How to calculate Machining and Operating Cost of Each Product using Average Production Cost using this online calculator? To use this online calculator for Machining and Operating Cost of Each Product using Average Production Cost, enter Production Cost of Each Component (Cpr), Cost of a Tool (Ct), Setup Time (ts), Number of Tools Used (Nt), Batch Size (Nb) & Time to Change One Tool (tc) and hit the calculate button. Here is how the Machining and Operating Cost of Each Product using Average Production Cost calculation can be explained with given input values -> 6960 = 15000-(80*54+(3/2)*((80*30) +80)).

FAQ

What is Machining and Operating Cost of Each Product using Average Production Cost?
The Machining and Operating Cost of each product using Average Production Cost is a method to determine the capital that must be invested for machining and operating processes to be afforded on a single product based on the average expense it took to manufacture a single component and is represented as Cm1 = Cpr-(Ct*ts+(Nt/Nb)*((Ct*tc) +Ct)) or Machining and Operating Cost of Each Product = Production Cost of Each Component-(Cost of a Tool*Setup Time+(Number of Tools Used/Batch Size)*((Cost of a Tool*Time to Change One Tool) +Cost of a Tool)). Production Cost of Each Component is the total amount that it takes to produce a single component from scratch, The Cost of a Tool is simply the cost of one tool being used for machining, Setup Time of each component is the time required to load/unload the workpiece and position the tool for production for one component, The Number of Tools Used is the total number of tools used for manufacturing a batch of products, Batch Size is the count of similar kinds of products to be manufactured & Time to Change One Tool is the measure of time it takes to change one tool during machining.
How to calculate Machining and Operating Cost of Each Product using Average Production Cost?
The Machining and Operating Cost of each product using Average Production Cost is a method to determine the capital that must be invested for machining and operating processes to be afforded on a single product based on the average expense it took to manufacture a single component is calculated using Machining and Operating Cost of Each Product = Production Cost of Each Component-(Cost of a Tool*Setup Time+(Number of Tools Used/Batch Size)*((Cost of a Tool*Time to Change One Tool) +Cost of a Tool)). To calculate Machining and Operating Cost of Each Product using Average Production Cost, you need Production Cost of Each Component (Cpr), Cost of a Tool (Ct), Setup Time (ts), Number of Tools Used (Nt), Batch Size (Nb) & Time to Change One Tool (tc). With our tool, you need to enter the respective value for Production Cost of Each Component, Cost of a Tool, Setup Time, Number of Tools Used, Batch Size & Time to Change One Tool 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 Machining and Operating Cost of Each Product?
In this formula, Machining and Operating Cost of Each Product uses Production Cost of Each Component, Cost of a Tool, Setup Time, Number of Tools Used, Batch Size & Time to Change One Tool. We can use 2 other way(s) to calculate the same, which is/are as follows -
  • Machining and Operating Cost of Each Product = (Total Production Cost-(Total Non-Productive Cost+Total Tool Changing Cost+Total Cost of Tools Used))/Batch Size
  • Machining and Operating Cost of Each Product = Total Production Cost-(Batch Size*Cost of a Tool*Setup Time+Number of Tools Used*((Cost of a Tool*Time to Change One Tool)+Cost of a Tool))
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