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The Hourly Efficiency Management System |
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This section explains how Kyocera’s "hourly efficiency" management accounting system is calculated.
The table below is an example of a simplified hourly efficiency report for a production amoeba unit in a component operation. |
| Item |
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| Gross Production |
6,500,000 ($) |
| Production Outside |
4,000,000 ($) |
| Total Internal Sales |
2,500,000 ($) |
| Total Internal Purchases |
2,200,000 ($) |
| Net Production |
4,300,000 ($) |
| Deductions |
2,400,000 ($) |
| Added Value |
1,900,000 ($) |
| Total Working Hours |
35,000 (hours) |
| Hourly Efficiency This Month |
54.28 ($) |
| Production per Hour |
122.85 ($) |
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Gross Production ($6.5 million) is obtained by adding Production Outside ($4 million) and Total Internal Sales ($2.5 million). Total Internal Purchases ($2.2 million), representing the cost of components and other purchases from amoebas within the company, is subtracted from Gross Production to yield Net Production ($4.3 million). Net Production is the total revenue for this manufacturing amoeba.
Added Value is the profit created by the amoeba. This figure is the balance remaining after subtracting Deductions (total expenses other than amoeba labor costs, shown as [$2.4 million]) from Net Production ($4.3 million). Recorded as Added Value, the difference between revenue and expenditure equals $1.9 million and represents the added value created by the amoeba. Dividing Added Value by Total Working Hours (35,000 hours) results in Hourly Efficiency This Month ($54.28).
Calculating hourly efficiency makes it possible for each amoeba to be aware of exactly how much added value it is creating per hour. An amoeba's business activities reflect efforts to raise this profit indicator. |
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The Hourly Efficiency Management System |
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