3.3.5 Quantities Produced

As with other manufacturing processes, there is a setup cost associated with the production of each order of forgings. This includes the cost of installing preforming tools, forging dies, trim dies, and computer programs, as required for the forging. The cost is spread over the quantity produced, so that the effect on piece price decreases as the order quantity increases.

As the total number of forgings anticipated over the life of the product increases, there is a decrease in amortized "per piece" costs such as:

  • Design and development of the forging
  • Construction of the forging tools
  • Installation of automation equipment
  • Providing special fixtures and gauges
  • Development of the forging processes.

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As with other manufacturing processes, there is a setup cost associated with the production of each order of forgings. This includes the cost of installing preforming tools, forging dies, trim dies, and computer programs, as required for the forging. The cost is spread over the quantity produced, so that the effect on piece price decreases as the order quantity increases.

As the total number of forgings anticipated over the life of the product increases, there is a decrease in amortized "per piece" costs such as:

  • Design and development of the forging
  • Construction of the forging tools
  • Installation of automation equipment
  • Providing special fixtures and gauges
  • Development of the forging processes.

Return to Table of Contents

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As with other manufacturing processes, there is a setup cost associated with the production of each order of forgings. This includes the cost of installing preforming tools, forging dies, trim dies, and computer programs, as required for the forging. The cost is spread over the quantity produced, so that the effect on piece price decreases as the order quantity increases.

As the total number of forgings anticipated over the life of the product increases, there is a decrease in amortized "per piece" costs such as:

  • Design and development of the forging
  • Construction of the forging tools
  • Installation of automation equipment
  • Providing special fixtures and gauges
  • Development of the forging processes.

Return to Table of Contents

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