How can they calculate the cost of producing the item for each of the different quantities since the set up time must have been incorporated into the roll up for 1 item, when in real life the set up times are per production order not per item?
You can create a Simulated Production Order with the 3 different quantities. The simulated prod. order is found in the planning section of manufacturing its purpose among other is basically just that.
The same way you can specify the Lot Size on the item to tell the system how many units it shall base its normal "Calculate Cost Price" function on.
I tried using the Simulated Production Orders as you suggested. I made one for 5 items and one for 10 of the same item.
The result was exactly double to make 10 as to make 5. The set up times are not being taken into account - there are some lines where there is a setup time but no run time and the cost of that is zero.
Maybe I have missed a setting ?
Example from Detailed Calculation screen:
Setup time 120 MINUTES
Run time 0 MINUTES
Cost Time 0
Unit Cost 0.48
Total Cost 0.00
Notice that "Cost Time" is 0 = no cost from the route at all? Are you sure that the Work Center/Machine Center you are using is having a default Unit Cost?
It has a Direct Unit Cost (= 0.48) - where would I put the Default Unit Cost ?
An example operation with both Setup and run time
Setup time 30
Run time 5
Cost time 5
Unit cost 0,26667
Total cost 1.33
Well I just tried again in a fresh demo company and it still works exactly how it is supposed to. It still looks like its not including your setup time at all. Only the operation time.
But I also gotta ask (should have asked that initially - sorry), which version of NAV are you running? I have tested this on NAV 2013. And where in the simulated job are you looking up the above calculation?
Another way to do a similar calculation is to set the Lot Size field on the Item card and then use the BOM Cost Shares function from the Item card.
It seams you are missing a setup. Go to manufacturing setup and make sure the box "cost including setup" is checked and rerun. You should now see your setup time included.
All the best,