How to assign indirect costs in production

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Solution (Verified) This post has 1 verified solution | 11 Replies | 4 Followers

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Prasad posted on 2012-10-27 11:45

Hi all,

 

Could you please explain ho to make setup for attaching the indirect costs to appear in the costing sheet of the production.

 

Thanks,

Prasad

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Solution (Verified) AdamRoue replied on 2012-10-27 18:53
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Do i need to attach the costing sheet to production order ? - No. The costing sheet is the structure of costs for the entire business.

If not how that cost will add to production order ? It is how the system is designed.

Do we create the Costing sheet especially to load the indirect costs ? Yes it is the only way to calculate indirect costs of any complexity (single quantity element can be applied through the cost category). However even if you do not use them these helps aggregate a view of the costs by the item cost groups - it is really why we have cost groups.

Without creating the costing sheet cannot we add the indirect costs to production order ? No, not in a traditional sense, although you have the quantity cost category that is an alternative.

What is the manual name that contain information about the Costing sheet configuration ? Depends upon the version, inventory costing is the obvious, then try financial

Do i need to create the seperate Costing sheet foreach product ? there is one per company, it is how the company costs.

Does the costing sheet configured by either Finance consultant or other modules consultant ? Finance generally but depends upon the ownership due to teh structure of costs in production.

I think NAVISION does not have the costing sheet functionality , if yes please let me know in NAV ? No it does not have the same concept.

“Any fool can know. The point is to understand.”
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AdamRoue replied on 2012-10-27 12:03

It does not "appear" in the costing sheet you design it in the costing sheet itself. You create the notes and add the indirect elements based upon the material and labour cost grouings in the costing sheet itself.

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ameen replied on 2012-10-27 12:44

Hi Adam ,

I would also like to know that how to add the indirect costs to production order  ( it means that indirect cost should add to the produced material) ?

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AdamRoue replied on 2012-10-27 12:51

Simply you create a new node in teh costing sheet, set the header as a cost group and node below will be surcharge or rate; the calculation tab on this type links it to a cost group and then the costing version lines define the rate/percentage values. The cost group linkage can be at a sublevel of the costing sheet.

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ameen replied on 2012-10-27 17:03

After above process  ,

Do i need to attach the costing sheet to production order ?

If not how that cost will add to production order ?

Do we create the Costing sheet especially to load the indirect costs ?

Without creating the costing sheet cannot we add the indirect costs to production order ?

( In Navision directly we can enter the indirect cost in the Released production order and when we post that amount would add to Produced item )

What is the manual name that contain information about the Costing sheet configuration ?

Do i need to create the seperate Costing sheet foreach product ?

Does the costing sheet configured by  either Finance consultant or  other modules consultant ?

I think NAVISION does not have the costing sheet functionality , if yes please let me know in NAV ?

Thanks in advance

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Solution (Verified) AdamRoue replied on 2012-10-27 18:53
Verified by Prasad

Do i need to attach the costing sheet to production order ? - No. The costing sheet is the structure of costs for the entire business.

If not how that cost will add to production order ? It is how the system is designed.

Do we create the Costing sheet especially to load the indirect costs ? Yes it is the only way to calculate indirect costs of any complexity (single quantity element can be applied through the cost category). However even if you do not use them these helps aggregate a view of the costs by the item cost groups - it is really why we have cost groups.

Without creating the costing sheet cannot we add the indirect costs to production order ? No, not in a traditional sense, although you have the quantity cost category that is an alternative.

What is the manual name that contain information about the Costing sheet configuration ? Depends upon the version, inventory costing is the obvious, then try financial

Do i need to create the seperate Costing sheet foreach product ? there is one per company, it is how the company costs.

Does the costing sheet configured by either Finance consultant or other modules consultant ? Finance generally but depends upon the ownership due to teh structure of costs in production.

I think NAVISION does not have the costing sheet functionality , if yes please let me know in NAV ? No it does not have the same concept.

“Any fool can know. The point is to understand.”
Albert Einstein

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Prasad replied on 2012-10-28 16:01

Hi Adam,

 Thank you very much for giving a clear picture about costing sheet. 

"Ameen"  - Thanks to you as well for posting right questions 

 

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Patnam X replied on 2012-11-2 17:12

Hi Adam, I am relatively new to setting us costing sheets, cost groups etc., I would like to clarify (whether or not do we need to set this in AX as a phase 1). Currently we use PLM to design/track product and BoM version and also use a shopfloor that capture the detailed production jobs in terms of hours and resources to finished production assembly work. typicall we have about 3 to 5 jobs that are common accross all production assembly. So in AX we wanted to import the released products and BoM and have a very basic route with 1 or two jobs that can be used across all item BoM and inproduction. We want to clarify the following:

we would like to capture some level of Job detail in AX 2012 as part of the production.  At minimum there will be 1 or 2 jobs per production assembly (even 1) and that will be common across all the production BOM. We thought of creating one route card for all of the item BOM and use operational scheduling method to capture the hours took to complete the job.  We are not experienced with setting up resource requirements and we don't want to track at the individual resource level. Just a generic level or even none would be preferred to start off with and then later on as we move into future phases we can customize. 

Now, question is whether do we need to set up the route in order to define the production lead time? this is critical for the master planning to accurately plan the PO and production orders. 

If we go with a route, what is the bare minimum we need to take in to account, assuming that we want to see the hours per job and there is 1 or two jobs at the most that will common for all assembly?  When I set up a route, i see cost categories, resource group etc., do we really need to define them? If so, can you point me a simple way to do that? 

We are planning to use the DMF beta 2 to import the Item and BOM. Since we use the PLM software to design and maintain the BOM and version, I believe we don't need to create product master and variants. We use the released product section to create item of type BOM, phantom or raw materials. I am looking at the Demo Files from the Data migration Framework and am bit confused as to which files to select to preview the data? 

 

Since DMF is still in beta, is there a better and simpler way to import BoMs and relesed product. I understand that we need to import into BoM, BoMTable & BoMVersion. Since it has reference to invetItem tables, I would assume that we need to import items as a first step  

3) how does cost group, calculation groups, costing sheet will fit in with the above scenario. We typically we define the item sale price for finished goods and purchase prices on raw materials.  what is the cost model we should look at and how to set it up so the system can suggest a price? we probably wouldn't need that to begin with in phase 1 release. However, we would like to capture the variance purchase price variance, job variance etc.,

Would appreciate your feedback.  Thank You 

 

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AdamRoue replied on 2012-11-2 17:38

Lots of questions Big Smile

1. You can create one route card for all items per operational unit (site) to begin with to capture hours.
2. The inventory lead time on the default order settings should (from memory) be used if no route exists, but ideally use routes. 
3. Operation, resource and run time per operation is about the bare minimum. However if you cost this you need cost categories for different labout types, but you could have one with one set rate. You also need a routing group, but again only one for time calculation and auto-consumption.
4. DMF is still in beta but there are no real alternatives except to get developers to write scripts.
5. Cost groups structure the visible nature and indirect cost apportionment if configured this way. Calculation groups define the profit percentage on the cost on the cost roll up, whilst the costing sheet is how the company costs overall and is required.  

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Harish Mohanbabu replied on 2012-11-2 18:02

Hi,

Patnam X:
Since DMF is still in beta, is there a better and simpler way to import BoMs and relesed product.

As someone who has been following DMF since pre-alpha version, the latest Beta version (2.0) of DMF is now packed with more features (http://blogs.msdn.com/b/axsa/archive/2012/10/22/microsoft-dynamics-ax-2012-data-migration-framework-beta-2-0-is-now-available-on-information-source.aspx) including support for SQL Server 2012 and more likely closer to the final version.  For these reasons I would encourage you to start using this version.

Harish Mohanbabu
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Patnam X replied on 2012-11-2 18:46

Thank you Adam. I really apprecaite your feedback.

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Patnam X replied on 2012-11-2 18:54

Thanks Harish. Your statement is encouraging. Yes I installed it and I will test it out. I am wondering if you have imported released products and BoM. if so, what are the fiels that I should be using from the demo files. I got confused with BOM files with _basic and _Enum. Do I need both of these file. ie. Do i need to collect the data in two seperate files and load them seperately? 

I saw both Products and Items as available entity for data import.  We are not using product master and variants (as it is done in the plm software). typically, I would create a released product, define whether it is a BoM, phantom or raw material and them create BoM version, associate a route to it. Run Master planning to generate the Planned PO and production order based on the demand and we would firm up the purchase and production orders. 

In this case, how do we import items? DMF has both product as well as items entity for import that confused me. Apprecaite if you could clarify.

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