There are three cost factor columns. The cost factors that shall apply are entered on the Current row. On the Future row you can enter future cost factors, such as for the next budget year. When making pre-calculations, post-calculations or WIP List, you can choose whether to use current or future cost factor alternatives to calculate the processing cost. On the Previous row you can see the previous cost factor. Every time the current cost factors are changed, the values on the Previous row are changed automatically.
Three cost factor alternatives.
Tip! You can enter your own cost factor headings, under the Work centers heading under the Manufacturing tab in the Settings procedure in the Global Settings module.
The three cost factor columns are combined in the system into seven Cost factor alternatives (see the image below) that can be used for pre-calculations, post-calculations, WIP List and when estimating annual volume. For example, column 1 can be Direct Labor (DL) and column 2 can be Manufacturing Overhead (MO). During calculation, you select cost factor alternative 1 if you only want DL for the calculation, or cost factor alternative 4 if you want both DL and MO. You can use the third column, for example if you want to divide the MO into variable and fixed overhead costs, respectively. You shall always enter the cost factor in the company currency per hour, for example SEK/hours.
The available cost factor alternatives for calculations.
Cost Factor Exceptions
If you have activated the setting Use Cost Factor Exceptions?, under the Work Centers heading under the Manufacturing tab in the Settings procedure in the Global Settings module, you can also make cost factor exceptions. Two additional fields are then opened where you can enter Current and Future cost factors for two exceptions from the regular three cost factors.
Cost factor exceptions under the regular cost factors.
The cost factor exceptions entered for the work center can then be selected for operations in the Preparation procedure. This selection will then affect the Pre-calculation when calculating labor costs. The cost factor alternative is saved on the manufacturing order during the operation reporting and is valid for the order throughout the entire flow, for example in the WIP List and Post-Calculation.
You can for example use cost factor exceptions for work centers or machines that sometimes are run using lower staffing or an automatic machine. This means that the payroll costs will be lower in these cases than when using the regular staffing. Another example could be a laser cutter that uses a more expensive gas for certain material in certain operations. This means a higher cost of consumables (variable MO Mark-up).
By activating the setting Use staffing factor exceptions for operations?, under Preparation under the Manufacturing tab in the Settings procedure, you can enter staffing factor exceptions on operations. This way you can also manage temporary changes in the staffing in the loading.
Tip! You can enter your own headings for the cost factor exceptions. Click in the yellow heading or use Shift+Tab when the cursor is placed in the 1st exception field.