Many businesses require a greater degree of clarity about where costs are actually incurred, and on which products, product lines and customers profits and losses are made.

Greater in importance than almost any other initiating information, this analysis has to be right in order to take the best, and right actions.

This leads to clarity on problems related to:

• Labor or material costs vs. quote
• Processing inefficiencies vs. quote
• Problems with standards or quoting process
• Pure pricing problems or out-dated manufacturing strategies.

Our approach involves developing a dynamic costing model which can show profit by product or product family, generally at the variable margin level.

Working with financial management at the company, AMG's product-profitability model development involves:

• Testing and auditing standards as a starting point
• Applying pricing and direct costs (per standards) directly to parts
• Applying indirect manufacturing costs logically and fairly
• Allocating other overhead costs logically and fairly
• All costs must tie back to the general ledger for the same period of the study for validity.