Labour Cost in Routing

dynamics_prasanth

Hi All,

I want to calculate the Cost of Production in NAV 5.0. In order to facilitate this, I am trying to setup a work centre and routing. But I dont know how to include Labour Cost against a work centre. Can anybody help?

Thanks in Advance [-(

bstoyano

Why not set a cost for the work center?

chengalasettyvsrao

Go to that work centre/machine centre - > Posting tab.

Enter the Direct Unit cost , Indirect cost % , Overhead rate.

I suggest you just go through the Manufacturing Costing manual also .

dynamics_prasanth

Hi,

Actually my requirement is to get the Cost incurred by a Work Centre on Labour, Energy, Fuel etc. So I want each of these costs separately.

Thanks

cernst

Use Direct Unit cost as the cost for labour and then use indirect cost % and/or overhead rate as the cost for fuel, energy and other overhead costs.

dimus

You can setup separate WCs for fuel, labor cost, etc. It would allow you to post to different GL accounts. The only downside of this is planning (if the cost is based on the time) that can be quite easily fixed by a small modification to the planning routine.

dynamics_prasanth

Hi,

The cost and time will vary from Material to Material. The Labour Cost will also vary from task to task. [-(

Thanks

chengalasettyvsrao

the only options are Direct Unit cost , Indirect cost % , Overhead rate.

if you required the detail then it requied customization.

bstoyano

dynamics_prasanth,
I think you should clarify a bit your requirements here. And I am sure someone will help adequately. Because now you have given very generally your requirement (labour cost with work centers), and people give general answers.
Ask the right questions to get the right answers (btw, someone has it in the signature)

dynamics_prasanth

Hi bstoyano,

I want to calculate the Cost of Production in NAV 5.0. In order to facilitate this, I am trying to setup a work centre and routing. But I dont know how to include Labour Cost against a work centre. Actually my requirement is to identify how much & what all Costs are incurred by a Work Centre for a process eg: while perofrming a work, how much cost incurred by a Work Centre on Labour, on Energy, on Fuel etc . I want to know each of these costs separately. The cost and time will vary from Material to Material. The Labour Cost will also vary from task to task.

Hope, now you understood my question :thumbsup: .

Thanks

bstoyano

Nope, it's not clear yet. [-X

So far the solid facts we have are:
1. You want to calculate cost for produced items
2. You want to include Labour costs in the calculation
3. You want to include Fuel costs in the calculation
4. You want to include Energy costs in the calculation
5. You want to include some other costs in the calculation

So far - what I do not know is how you calculate the costs in 2,3 and 4 per item? Is it a quantity per item or is it related to some other production parameter?

What do you mean that Labour costs, etc., may vary? Do they vary for a single item? If not - then everything is ok. You have different routings for different items.

And one more thing - I feel like you have a misunderstanding of a work center. Think of it as of a very simple operation - like tightening of one bolt. If for one produced item you have to tighten 4 bolts, then in the routing you write 4 times operation 1 at workcenter BOLT. In the workcenter you set the per-bolt unit cost.

If you want to know how much work was done in a workcenter (e.g. how many bolts were tightened) then you should look at the Capacity Ledger Entries.
If you want to know the cost of the item produced - look at the Item Ledger output entry. And beware of Average costing

dynamics_prasanth

Hi,

Actually my requirement is to know how much Labour, Energy etc were consumed and the cost incurred in the process of tightening one bolt.

bstoyano

Well, I think these costs should come as an input in NAV. This is outside the ERP. Measuring the time (labour), fuel consumption etc. should be done as a separate project outside NAV. Once you have your estimates for these parameters you can input them in NAV and it will calculate everything correctly.
I know that there are methodologies for estimating the costs in manufacturing companies.

chengalasettyvsrao

bstoyano wrote:

Once you have your estimates for these parameters you can input them in NAV and it will calculate everything correctly.

Yes , this is the only suggestion to put your costs. Use the Overhead rate and indirect % fields.

dynamics_prasanth

Hi friends,

Thanks to all of you for your suggestions.

Regards =;

bstoyano

Are you not going to share your "field" experience with us, your buddies How you actually did it.