Original Date: 01/23/1995
Revision Date: 01/18/2007
Information : Controlling Manufacturing Costs Using Activity-Based Costing
The Service Center Information System (SCIS) is a computer-based cost tracking system that allows Sandia National Laboratories management control of the size of various activities by funding only those services used within a process. This enables the accumulation of the true cost of performing a specific task.
Prior to its application, overhead costs to customers were charged through a single rate for each service center, where rates were adjusted to ensure full cost recovery. It was difficult for customers to monitor progress on work orders, know when charges would occur, how much would be incurred, and what was included in the total amount. Sandia National Laboratories found it was impossible to evaluate the cost and recovery for any given activity.
Development and implementation of SCIS was a joint effort between Sandia management and its end users. Common goals included (1) implementing a corporate-wide activity-based costing system, (2) distributing service center overhead to improve cost management and accountability, (3) recording and managing agreements between the service centers and customers (both internal and external), and (4) validating accounting information and funding.
SCIS features real-time processing of service orders, weekly updates to the financial system, multiple interfaces to other corporate systems, and on-line query capabilities. It has provided a more thorough understanding of the direct and indirect costs of doing business, making the job of evaluating corporate effectiveness and efficiency easier.
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