Understanding Simulated Rates

You can effectively manage changes to a work center by tracking rates for labor and machine costs. You can update simulated rates for machine and labor hours by work center and cost method. The system uses these values in other manufacturing calculations that are used in costed routings, labor rate variance reports, and direct labor efficiency reports.

If you use standard costing, you must set up the simulated rates for work centers.

If you use actual costing, you can use work center rates for machine and labor costs. You set up the source for machine and labor rates in the manufacturing constants.

You can set up the work center rates even if you have decided to use labor or machine rates. The system uses the work center rate as the default rate if no other rates have been selected.