Using the UEP Method to Compare the Profitability of Small Cement Artifact Industry Production Lines

Abstract

The article aimed to measure, comparatively, the transformation cost of the products of two manufacturing lines in order to know the total manufacturing contribution margin of these segments in a given period. Descriptive methodology was used, with a qualitative approach and in the case study format. The costing method of the Production Effort Units (UEP) was used to determine the transformation costs of the mix produced in the “Prensa” and “Tubos” lines, which facilitated the calculation of the total manufacturing contribution margin for the period in these productive sectors . The resulting results made it possible to assume that the “Prensa” production line is the most profitable, because it was responsible for 57.83% of the month's operating result, despite having only 47.16% of participation in monthly revenue. In other words, even selling less than the “Tubes” line (R $ 84,260.66 against R $ 94,406.53), the products in the “Prensa” line managed to generate a higher manufacturing contribution margin (R $ 32,469.39 against R $ 23,678 , 46). The study contributes by the use of the UEP method in a small factory with the purpose of knowing the profitability of its production lines, an approach that is not usually found in the literature on costing methods. Still, it highlights the relevance of calculating the manufacturing cost in a consistent way to support the analyzes on the performance of market segments, prioritizing the “profitability” factor over the “billing” criterion.