OpenPro Manufacturing and Labor Processing Options
Manufacturing and Labor Processing Options
When posting transaction with Manufacturing several options are available. The Bill of Operations or Routing is used for calculating labor standards.
This manual describes those options and how they work.
In the business rules the IC Method is used to calculate what costing method to be used in manufacturing process and inventory process.
Most manufacturing companies use Standard Costing (STD COST), because it standardizes the cost through the year and at the end of the year you can calculate the difference and write off the differences. But some use the moving average (AVG COST), First in First Out (FIFO) and Last in First out (LIFO).
And this flag Use Pay Time for Work Orders uses time based upon is timecard means they have to clock in an out of the work order.
- D – Direct will use actual time entered on the work order.
- T - Employee input uses time input from the Pay times table.
- H – Time Card input will take the time from the time card system from the Pay Hours Table.
This is all calculated in the wo cost includes program.
In the business setup for the company you can have different options for overhead.
Fixed and variable overhead rates are set in the company location table.
Based upon the company location you can select Part Cost, Machine time, Labor Time, or a combination of all three. This rule let you choose on what basis you want to use for the Fixed and Variable overhead costing.
Cost buckets can change and where you post the cost out of the 5 different buckets.
Based upon the manufacturing business rules
Costing for fixed overhead options and history of rate amounts
This rule shows historical changes for the fixed and variable overhead costing amounts for prior years.
Variable rate amounts for the costing methods.
All those options change the cost you see on the items and what you see when posting work orders and inventory labor and general ledger.
When processing a work order these options are very important.
With no business rules OpenPro will only post material cost. And it will take the standard cost that is on the item and use that for the posting. If LABCOST is turned on then it will post labor cost and add it to the product cost when completing a work order.
If you have these business rules turned on it shows the account that Direct Labor cost will post to and if you will be posting labor as part of the work order processing.
COSTFIX and COSTVAR options are for fixed and variable overhead costing options.
With COSTSTD , If you are not using standard costing method you can still post work order using standard costing logic. Then the cost will just come from the IC item cost buckets.
GL Chart of accounts need to be setup before posting to the labor accounts.
Create a work order.
Clock in an out of the work order to add direct labor.
Clocking in and out of the work order calculates the actual labor applied to the work order, just like when you issue material to the work order the material cost is applied.
This actual is based upon the .15 of an hour logged into the work center.
The clocking in and out of a work order adds labor cost to time sheet and the work order as well. The wage that post on this time card is from the standard wage cost of the Admin > Business Rules > Employee Reps.
Notice the manual entry of time like we did, is not reflected on the work order time.
Clock in again and using the time card processing
Labor rate options:
Other options is to use the actual employee wage table from payroll, the reps table based upon login or use the wage on the operation work center (average of employees wage).
In the manufacturing table you can change what labor rate you want to use, based upon these options it calculates the labor rate, if no rule exist it take the rate from the ?
If no business rules setup, then it defaults to login SM REPS rate.
Business rule Employee Code – uses Employee payroll wage to calculate the BOO labor rate, if not and employee it will fall back to the login SM REPS rate
REPSRATE – Login sm rates wage amount
WORKCENT - Work center employee rate
Employee Rate is an average of all employees that work in that work center.
See the cost on a work order
Click on COST.
Depending on the options selected in the business rules. Option 1
When selecting overhead method, you can see it added to the totals of each section
Depending on the options selected in the business rules. Option 2
Depending on the options selected in the business rules. Option 3
When reviewing the work order you can Drill down the detail labor clock in and out
When you drill down to the COST details it shows the screen below.
Material cost options and use of sales order configuration
When you build an order using the sales order configuration you can add additional items to the work order BOM. These will then be flagged as configured bom items, you have the options to have the material cost of those items be added to the finished good item.
Under manufacturing maintenance table you can change the work order options to include cost of all the work order added items. Below is the work order BOM with Configured items.
With the business rule turned on
Cost includes all the configured items into inventory control.
Same happens with General Ledger posting.