Tooling Cost Allocation Mismatch
Definition
Tooling amortization must align with expected part volumes and ATO lives; mismatches lead to pricing errors and margin erosion in motor vehicle manufacturing.
Key Findings
- Financial Impact: 2-5% gross margin loss per part run; AUD 20,000+ unrecovered on AUD 130k tooling
- Frequency: Per production contract or upgrade
- Root Cause: Lack of integrated tracking between tooling spend, depreciation schedules, and quoting systems
Why This Matters
The Pitch: Motor Vehicle Parts players in Australia 🇦🇺 lose 2-5% margin on parts due to unamortized tooling costs. Automation matches amortization to production volumes, recovering full costs.
Affected Stakeholders
Estimator, Cost Accountant, Sales Manager
Deep Analysis (Premium)
Financial Impact
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Current Workarounds
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Incorrect Tooling Depreciation
ATO Depreciation Audit Failures
Cost of Poor Quality from Chargeback Disputes
Supplier Indemnification Delays under ACL
Rush Order Costs from ECO Delays
Idle Equipment from ECO Bottlenecks
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