Example of Single Level Cost Rollup
This example extends the previous example and illustrates how the unit cost of a make item is calculated by the Roll up Costs process when single level cost rollup is selected in the cost scenario.
Scenario
Your organization is now manufacturing an item RS-ABCDE that has a structure as shown in the image here. To make this item, you need the item RS-ABCD and the material RS-E. You've published the cost for RS-ABCD (as calculated in the earlier example) and it's available for cost planning.
The start date of work definition is same as defined earlier.
Cost Scenario
Create a cost scenario with the rollup scope as Selected Items and also select the Single-level Cost Rollup option. You want to use the already published costs for RS-ABCD and, therefore, you must select the Single-level Cost Rollup option. If you don't select this option, the Roll up Costs process will recalculate the costs for RS-AB, RS-CD, and RS-ABCD.
Define the standard costs, resource rates, and overhead rates as mentioned in the previous examples. Additionally, define this standard cost for the new material RS-E.
Item |
Cost Element |
Cost Element Type |
Expense Pool |
Unit Cost |
---|---|---|---|---|
RS-E |
CML-Material |
Material |
1.00 |
Analysis
After you define the cost scenario and the corresponding standard costs, resource rates, overhead rates, run the Roll up Costs process for the cost scenario.
Rolled Up Costs
RS-ABCDE is made by using the item RS-ABCD and the material RS-E. You need welding torches and the work must be inspected by an inspector. The item cost calculation for RS-ABCDE is shown in this table.
Number |
Operation Sequence |
Item |
Item Description |
Unit Cost |
Quantity |
Extended Cost |
---|---|---|---|---|---|---|
Main (#V1) |
RS-ABCDE |
RS-ABCDE |
54.876 |
1 |
54.876 |
|
10 |
Frame Assembly |
49.80 |
||||
RS-ABCD |
RS-ABCD |
38.80 |
1 |
38.80 |
||
RS-E |
RS-E |
1.00 |
1 |
1.00 |
||
Welding Torch |
5.00 |
2 |
10.00 |
|||
20 |
Inspection |
4.00 |
||||
Inspector |
4.00 |
1 |
4.00 |
|||
Plant Overhead |
1.076 |