Defining Cost Categories for Manufacturing Routing and Work Center

You can create a cost category to use the Manufacturing Routing and Work Center feature. Cost categories help define expenditures associated with a work order. For example, you have a warehouse and employ workers to assemble widgets that you sell. You need to track costs associated with employee labor, warehouse machines, and overhead associated with each work order.

You can create one of the following eight cost categories to help track costs:

• Direct Cost – These costs are calculated when you record time for these items.

  • Labor Setup – Cost of time for labor to set up a run

    For example, this is the cost of paying an employee to set up the machine that will be used to paint the widget.

  • Labor Run – Cost of time for labor to run an assembly

    For example, this is the cost of paying an employee to use the machine that paints the widget during the assembly run.

  • Machine Setup – Cost of time spent to set up a machine to be used in a run

    For example, each time you set up the machine that paints the widget, wear and tear costs you .02 cents.

  • Machine Run – Cost of time spent to run a machine during assembly

    For example, each time you use the machine that paints the widget for an assembly run, wear and tear costs you .04 cents.

• Overheads

  • Labor Setup Overhead – Cost of overhead associated with labor to set up a run

    For example, this is the safety training expense incurred for an employee who sets up the machine used to paint the widget.

  • Labor Run Overhead – Cost of overhead associated with labor to run an assembly

    For example, this is the safety training expense incurred for an employee completes an assembly run.

  • Machine Setup Overhead – Cost of overhead associated with setting up a machine used in a run

    For example, this is the water expense incurred by running a machine during the machine set up.

  • Machine Run Overhead – cost of overhead associated with running a machine during assembly

    For example, this is the water expense incurred by running a machine during an assembly run.

To set up a cost category for Manufacturing Routing and Work Center:

1. To add choices to this list, go to Setup > Accounting > Setup Tasks > Accounting Lists..

2. Click New.

3. Click Cost Category.

4. Enter a name for the cost category. For example, US Labor Run Standard.

5. Select a cost type for this category. Choose from the following:

   • Labor Run

   • Labor Run Overhead

   • Labor Setup

   • Labor Setup Overhead

   • Machine Run

   • Machine Run Overhead

   • Machine Setup

   • Machine Setup Overhead

6. Check the Inactive box if you do not want this category to show in lists.

For information about creating a new cost category, see Creating Cost Categories.

Related Topics

Setting Up Manufacturing Routing

Enabling the Manufacturing Routing Feature

Setting Routing Preferences

Defining a Manufacturing Charge Item

Creating Manufacturing Cost Templates

Creating Manufacturing Work Centers or Groups

General Notices