Allocate Manufacturing Overhead Costs More Quickly

  • Operations
  • 3/5/2024
Coworkers Talking in a Factory

Key insights

  • Profit is all about knowing your costs and assigning manufacturing overhead costs.
  • Power BI offers a useful alternative to Excel models, allowing you to more easily analyze revenue and cost components for each customer, product line, and product.
  • Watch our video to see how Power BI can help you.

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To really know your profit, you must master allocating costs.

Many manufacturers use Excel models to analyze marketing, research and development, facilities, inventory turns, and shipping material costs in order to allocate soft costs to a SKU. But here's the catch: these models typically depend on complex data extracts and can be difficult to interpret and maintain.

Watch our video below to learn how Power BI can help you perform a financial analysis of your business and easily explore financial data outside the confines of a financial statement.

The benefits of Power BI

The video example above illustrates how a client in the golfing equipment manufacturing industry can use Power BI reporting to more quickly assign manufacturing overhead costs. The client provided a product list, customer list, and five-year income statement.

CLA allocated overhead to a SKU-level margin, breaking down costs by labor and product production stage ratios. Then, created a report allowing the manufacturer to:

  • Understand drivers of cost and profit by viewing income statement break downs by customer, product line, and product
  • Analyze dynamic income statement measures and revenue by year with forecasts and drill-down capabilities
  • Compare top revenue-producing customers with all others
  • Compare gross profit by customer location using an interactive map
  • Filter using dynamic slicers
  • View income statement measures per unit for each product and product line

While a dashboard is not a replacement for a financial statement, it can help uncover business profitability drivers that can be obscured in an income statement.

How we can help

Any calculation performed in Excel can be done in Power BI — and presented in an interactive interface designed to help you make key financial decisions for your business. Because the data is fed to the Power BI model automatically, it’s very easy to maintain.

Contact us to learn how we can help you perform a financial analysis of your business using Power BI.

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