9.1 Objective

The focus of this chapter is on the identification and characterization of manufacturing costs as they are estimated and incurred by defense contractors. This chapter describes the nature and structure of manufacturing costs and the various techniques used to estimate cost. The objective is to establish an understanding of the composition of manufacturing costs and discuss the manufacturing cost estimating process.  At the end of this chapter you should be able to:

• Identify the nature of manufacturing cost;
• Identify the requirements for Cost Accounting Standards;
• Describe the various cost estimating methodologies in use today;
• Define and describe Learning Curves;
• Describe the relationship between rate, quantity and costs; and
• Identify other cost considerations and methodologies. 

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