Labor Costs

Labor costs are calculated for a part by accumulating the labor costs associated with each effective operation.  For each operation of an MRP part, the standard labor hours per piece is calculated from routing and workcenter information and is multiplied by all labor rates for the associated workcenter.  The labor hours per piece is calculated as follows:

1.   If the piece rate standard is in pieces per hour, and the operation is not fixed-time or miscellaneous, then the operation's piece rate is inverted to give the hours per piece.  Piece rate is used only for MRP parts.

2.   If the operation is labor-paced and is not a crew operation (crew flag set to N on routing),

3.   If the operation is labor-paced and is crew operation (crew flag set to Y on routing),

(because the piece rate is expressed in terms of the crew, and each person will incur labor cost for the elapsed time of the operation).

4.   If the operation is machine-paced (the associated workcenter is machine-paced),

(because the piece rate will be expressed in terms of machine hours).

5.   If the operation is fixed time (batch sensitivity flag = N),

(because the PC labor hours are expressed in terms of hours per order).

6.   If the operation is fixed time (batch sensitivity flag = Y),

(because the PC labor hours are expressed in terms of labor hours per batch, and there may be multiple batches per order).

7.   If the operation is miscellaneous or outside processed, then the miscellaneous cost feature will be used.  This feature may yield a labor cost, depending on the rate code.

8.   If the operation is for a JIT part, and if the batch sensitivity flag = N, then labor and machine hours are treated as hours per piece.

If the operation is for a JIT part, and if the batch sensitivity flag = Y, then labor and machine hours are treated as hours per batch.