Description

The Product Costing module generates and maintains cost data for the manufacturing system.  The system maintains three sets of costs:

·     Current costs, which may be used to track changes in costs throughout a fiscal year.

·     Standard costs, which are used to value inventory and are typically frozen for some fiscal period.

·     Simulated costs, which can be used to simulate the effect that changes in raw material costs or labor and overhead rates will have on end items.

The Product Costing module has two major functions:  developing costs and reporting costs.

Developing Costs

Three tools help you develop product cost information: 

·     Cost generation.  Costs are built up, level by level, from the lowest level of the bill of material to the end item.  The material cost of an item is calculated based on the material cost of its components and how those components are used (quantity per and scrap information).  The labor and overhead costs are calculated based on labor and machine requirements as defined on the part's routing, and overhead rates in the facilities in which production occurs.  Cost totals are calculated at each level for material, labor, and overhead, as well as any number of user-defined cost elements.  Costs may be regenerated on a full or selective basis.

·     Simulation capabilities.  Cost simulation allows you to analyze how changes in a specific cost element will effect the total cost of producing manufactured items.  You can simulate changes in the cost of raw materials, labor, and overhead rates.  The changes may be defined as a percentage change (such as a 10% increase) or an actual value.

·     Cost rollovers.  A cost "rollover" involves developing one set of costs and using those costs to establish the value of another set of costs.  For example, rather than modifying standard costs directly, you may wish to generate, analyze, and adjust current costs until they are acceptable.  You can then "roll" the current costs into the standard cost values.  In addition to rolling current costs into standard costs, you can also roll simulated costs into either current costs or standard costs.

Reporting Costs

Product Costing allows you to analyze product costs, review the cost information in the MAC-PAC database to ensure it is complete, and evaluate the results of cost generations and simulations.  The cost data may be viewed in a variety of formats, including:

·     A list of parts and their total, material, labor, and overhead costs.

·     An indented bill of material, identifying the costs at each level