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Manufacturing

Production cost

Updated in 5.20.70

What each product should cost (its standard), what each production order really cost, and the difference between them. In a company that keeps its stock perpetually, every move of an order is posted to the books as it happens, and its variances are posted when it is closed.

Where

Manufacturing › Production cost, and the Cost tab of a production order

Who

«Read production cost» reads the orders' cost, the standard costs, the overhead rates and the accounts. «Set standard costs and overhead rates» freezes standards, keeps the overhead rates and chooses each work centre's cost centre.

The orders' cost

Each order that has moved shows its Standard a unit, the Standard for the units reported, the Actual cost so far, what it still holds In work in progress, and its Variance once it is closed. Choose Open or Closed in State.

The cost of the furniture workshop's production orders

Press an order's number to open its cost: the standard against the actual for the materials, the labour and the machine and overhead; each material's standard and actual quantity and value; the variances; and every journal entry the order made, each opening the entry. The same is the Cost tab of the order itself.

The cost of a closed order of 10 chairs

Standard costs

The standard of a product is what one unit should cost: the materials of its bill of materials at their cost in the stock (a sub-assembly at its own standard), the labour and machine time of its default routing at the work centres' rates (the setup shared by the routing's batch), and the overhead rates in force.

1
Open Standard costs. Each product with an active bill shows the standard in force today and the Next one.
2
Tick the products to freeze, or none for all of them, and press Freeze standards. Choose the day it is In force from (the first of the period) and press Freeze standards.
3
An order takes the standard in force on the day it first moves, and its output comes onto the shelf at it.
The standard costs of four products

Press a product to see what it would cost now, part by part and operation by operation, and every standard frozen for it. A part with no cost anywhere is named, and the standard says it is incomplete.

What an oak dining chair would cost now, and its frozen standards

Overhead rates

An overhead rate is what work carries beyond the machine and the people: so much A machine hour (power), so much A labour hour (supervision), or a Percent of the material (store handling). Give it a work centre, or none for every order, and the day it is in force from. Press New overhead rate, or Edit on one.

Changing the power rate of the CNC centre

Work centres and their cost centres

Each work centre's labour and overhead are absorbed under its cost centre. Choose it in Cost centre; the report by cost centre then shows what was spent there against what the orders absorbed.

Each work centre's cost centre

The entries

Accounts shows where production cost posts in the company's chart.

1
Materials issued: work in progress is debited and the stock credited, at what they left the shelf at. Returned: the other way.
2
As operations are finished with their times: work in progress is debited with the labour, the machine time and the overhead; Labour absorbed into production and Overhead absorbed into production are credited under the work centre's cost centre.
3
Output reported: the stock is debited and work in progress credited, at the standard.
4
Closed: what is left in work in progress for the order goes to the Material price variance, the Material usage variance, the Labour variance, the Overhead variance and Production scrap. Reopened, that entry is reversed.
Where production cost posts in the chart
The stock arrives and leaves on the same account every receipt and delivery posts to, so the stock and the books keep agreeing; a scrapped material is posted by its loss voucher, never twice.
A company that keeps its stock periodically posts nothing on the way: the cost is shown, and the stock is valued at the period's end. Nothing is posted until the company's books are set up.

Questions

Where is “Production cost” in Zyntra OS?

Manufacturing › Production cost, and the Cost tab of a production order

Who can use “Production cost”?

«Read production cost» reads the orders' cost, the standard costs, the overhead rates and the accounts. «Set standard costs and overhead rates» freezes standards, keeps the overhead rates and chooses each work centre's cost centre.