Subcontract Manufacturing (Purchase) Costs

Subcontract Manufacturing (Purchase) Costs
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Lewis Rosenberg
Lewis RosenbergFeb 08, 2023 02:28 PM
Hello Everyone! We were recently testing subcontract production in BC14 and noticed that the work …

1. Subcontract Manufacturing (Purchase) Costs

NAVUG ALL STAR
Lewis Rosenberg
Posted Feb 08, 2023 02:28 PM

Hello Everyone!

We were recently testing subcontract production in BC14 and noticed that the work center costs were not being copied to our purchase orders. After some testing, I discovered that the cause was that we had the Unit Cost Calculation field on the posting tab of our Work Center card set to TIME and not UNITS. Once changed to Units, everything worked as expected.

My question is what is the purpose of the TIME setting and how do you get a PO cost when the Unit Cost Calculation is set to TIME?

A tip for anyone else setting this up: If you check the Specific Unit Cost field on the Work Center Card, the PO cost will come from the Routing instead of the Work Center.

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Lewis Rosenberg
IT Manager
Mars Fishcare/Mars Horsecare
Chalfont PA
http://www.apifishcare.com
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D365UG-BC/NAVUG All-Star
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D365UG-BC/NAVUG Advisory Board Member (Former Chairperson)
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Twitter: @RosenbergL
LinkedIn: https://www.linkedin.com/in/rosenbergl
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2. RE: Subcontract Manufacturing (Purchase) Costs
Geralynn Robison
Posted Feb 10, 2023 02:21 PM

Hi Lewis,

In answer to your question

My question is what is the purpose of the TIME setting and how do you get a PO cost when the Unit Cost Calculation is set to TIME? I am not aware of any option for Unit Cost to populate on a Production Order Routing line when a Work Center is utilized with TIME in the Unit Cost Calculation.

The purpose of TIME Setting – The option of Time is utilized for the Unit Cost Calculation for Work Centers that are direct labor rates and/or have Machine Centers linked to the Work Center. Based on the settings in the Direct Work Center (Direct Unit Cost, Indirect Cost %, and Overhead Rate) will populate the Unit Cost (Shop Rate). Direct Work Centers are utilized when clocking in time per operation (SFI). Actual total posted Run and Setup Time will post to the operation.

Sub Contract Work Centers should have Units selected for Unit Cost Calculation. When the SubContract Worksheet is utilized Production Order has a link to the Purchase Order. Direct Unit Cost will populate within the Subcontract Worksheet that can be updated based on the Direct Unit Cost Excluding Tax required on the Purchase Order. When the purchase order is posted as invoiced, the Production Order Capacity Ledger Entry is posted for the total subcontracting cost.

Unit Cost populating in routing lines –

Sites with Standard Costing Method the Master Routing stores the Unit Cost for the SubContract Service. When the Production Order is created the Unit Cost will populate in the routing line of the Production Order. Purchase Order with a difference in the Direct Unit Cost when receive a SubContract variance once the PO is posted as invoiced. This does not pertain to sites utilizing Advance Subcontract where the SubContract Item Card stores the cost.

Geralynn Robison

NAV Support Analyst

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Phone: +1 210-672-2865

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