Success Story: Plasticorp Molding

Client Overview

Plasticorp Molding is a custom plastic injection molding company providing high-quality parts and tooling services to clients in the consumer products, automotive, and medical device industries. They operate multiple machines and handle a wide variety of plastic resins and complex mold designs.

The Challenges Faced

The nature of high-volume injection molding, coupled with fluctuating material costs and diverse customer needs, presented Plasticorp Molding with several accounting and financial visibility challenges:

• Inconsistent inventory valuation methods (mixing FIFO/LIFO approaches) leading to inaccurate balance sheets and COGS.
• Difficulty accurately tracking the cost of raw materials (plastic resins) with fluctuating market prices.
• Lack of clear visibility into the true cost and profitability of specific molds and production runs.
• Managing the accounting complexities of scrap, regrind material, and tooling amortization.
• Financial reports were not providing timely, actionable insights for operational decisions.

Our Solutions Implemented

Schapira CPA worked closely with Plasticorp Molding's finance and operations teams to address these issues through targeted accounting and advisory services:

• Analyzed production flow and inventory characteristics to recommend and implement a consistent, appropriate inventory valuation method (e.g., Weighted Average Cost or specific FIFO/LIFO).
• Established improved processes for tracking raw material purchases, consumption, and variances.
• Assisted in refining cost allocation methods to better capture machine time, labor, setup costs, and overhead per job/mold.
• Developed procedures for accurately accounting for scrap material value and tooling depreciation/amortization.
• Created customized management reports focusing on key metrics like material yield, machine utilization, and per-unit profitability.
• Provided ongoing advisory support to interpret financial data and make informed decisions.

The Results Achieved

By implementing these solutions, Plasticorp Molding achieved significant improvements in financial accuracy and operational insight:

• Optimized inventory valuation method, leading to a more accurate balance sheet representation and improved COGS reporting.
• Increased accuracy in job costing by 15%, enabling better pricing strategies.
• Reduced discrepancies in reported scrap value by 10% through enhanced tracking.
• Management gained clearer visibility into product line profitability, leading to strategic focus on higher-margin jobs.
• Streamlined month-end closing process related to inventory and costing, saving valuable accounting time.