BOP Program Statement 8337.01 § 5

costing is assigned to the Controller of the Financial Management

Branch (FMB), Associate Wardens (AW), and Superintendent of

Industries (SOI), Factory Managers, and the Manager, Product

Support Center (PSC).

a. The FMB must:

! Review and update activity rates annually.

! Notify the affected factories and PSC if the activity

rate is changed and if new cost standards should be

generated.

! Coordinate with the PSC before starting end-of-year

inventory valuation procedures and after completing the

end-of-fiscal year inventory valuation.

b. The Associate Warden (Industry)/Superintendent of Industry

must:

! Ensure the Work Measurement Coordinator maintains

accurate documentation of work measurement data.

! Ensure the Factory Manager maintains accurate bills-of-

materials (BOMs) and routings which contain

manufacturing times derived from and matching work

measurement source data.

PS 8337.01

7/31/2003

Page 3

c. Factory Managers must:

! Review the accuracy of all current production item BOMs

and routings annually.

! Obtain prior PSC approval of all changes to a BOM and

routing standard data. Work measurement data must be

provided to the PSC to support any changes in routings.

! Notify the PSC when job cost analyses reveal a

significant increase or decrease in material costs.

d. Product Support Center must:

! Generate new corporate standard costs when warranted by

changes in BOMs, routings, or material costs. The FMB

will approve the generation of new cost standards based

on changes in activity rates.

! Review periodically and verify that BOM and routing

data is derived from and consistent with approved work

measurement data.

! Designate the primary producing factory for each

finished good item FPI manufactures and load special

procurement keys for all other factories manufacturing

the same item. Special procurement keys direct the

system to use costing data from the primary producing

factory to determine standard cost at secondary

factories.

! Notify the Business Manager whenever the corporate

standard cost is changed on any item since changes in

standard costs affect inventory values.