Typical work activities are mixing the materials, compacting the materials, driving the line, and various other activities. By decomposing the plant operator’s corresponding resource costs, taking their salaries into account, and adding the costs you calculate in the first step, you will get the Workplace Costs.
The Workplace Costs then decomposed over a table, which, as briefly indicated above, one is calculating the activity costs for this operation. The causal assignments of these costs, via cause and effect related drivers, for example, the minutes you need to perform the single operation on the manufactured products.
That is the way to calculate the actual production costs. This method extends to customer-related activities then gives the total cost of customer, product, and activity. In the end, you have a profit and loss calculation per customer.
As shown in the picture above, one can also use the graphical profitability analysis, as shown here for customers. That is the way to come to grips with your conclusions.
The picture above is representative of the flow chart with which the model was generated. If you move your mouse over the image, an overview of the picture appears with the underlying details.