BOP Program Statement 8510.03 § 8

a. The Factory Manager and Business Manager must review the

Job Cost Analysis Report upon completion of a job. If variances

for materials and/or activity costs are within +/-10% of planned

cost, no further action is required.

b. The Factory Manager and Business Manager/Plant Controller

must ensure that completed jobs are reviewed.

— The analysis of these reviews is to be recorded in the

job text for all jobs with variances of +/-10% in

either material or activity costs.

Detailed analysis is required when production job costs exceed

the dollar threshold established for each product group as

listed:

Graphics & Services $10,000

Electronics & Plastics 10,000

Optics 1,000

Metals 10,000

Brush/Broom 2,500

Cut & Sew 5,000

Furniture 5,000

Systems Furniture 5,000

Dorm and Quarters 5,000

All variances resulting from incorrect Bill of Material and/or

routing must be corrected. The Factory Manager must notify the

PSC promptly for correction of the Bill of Material and/or

routing.

c. A listing of settled orders will be retained in the monthly

work papers. The Business Manager and Factory Manager must

ensure that all variances greater than +/- 10% are reviewed and

explanations of differences are included in the text of the job

in Millennium.

d. The Corporate Accountant will generate the Collective

Processing Report and ensure file accessibility to all locations.

This report must be reviewed to identify any potential problems

in active production orders.

e. The Factory Manager must notify the program manager of all

production orders that have significant differences between:

PS 8510.03

7/31/2003

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— planned and standard costs,

— planned and actual costs, and

— actual and planned costs.

f. The Associate Warden I&E/SOI is responsible for making sure

a quarterly review of all items not being produced at standard

cost is performed (i.e., configurable materials and items being

produced at planned costs).

— This review must verify that the Bill of Material and

Item Standard Routing is correct and that an approved

work measurement study exists for these items.