The system calculates the cost of a Work Order step based on the entries in the Work Order Entry window. The Work Order Processing Maintenance vendor configuration in the Vendor Maintenance window may predetermine some of the values.
The elements the system uses in the cost calculation are:
The unit of measure (UM) determines how the system calculates the cost of processing a specific quantity. The material cost is based on both the quantity and the unit cost of each individual line item. Additionally, you designate a fixed setup cost associated with each step.
The following examples use similar calculation methods and basic values. The C and M unit of measure values are a proportional amount based on the UM value and the Process Quantity. Included, is an extra example for the C unit of measure to show how larger line quantities affect the calculation.
The general calculation is as follows:
PQ/UM x PC + (QO x UC [for each line and add each line total for TMC]) + SC = TC (Total Cost for Step)
This is the explanation and an example of the system calculations for a Work Order step using a Lot unit of measure.
|
UM |
Process Quantity (PQ) |
Process Cost (PC) |
Line Item (material or process) |
Quantity (QO) to Process |
Unit Cost (UC) |
Total Material Cost (TMC) per line |
Setup Cost (SC) |
Total Cost (TC) for the Step |
|---|---|---|---|---|---|---|---|---|
|
Lot (default – 1) |
A Lot is considered 1 entire quantity |
Multiply one Process Cost to the proportional UM |
|
Multiply each quantity line by the Unit Cost to get the total cost of the material for each line. |
Add all material costs for each line in the step together for a total unit cost |
Add one Setup Cost for the step. |
|
|
|
|
1 |
2 |
1 |
(1 x |
10.00 |
= 10) |
9.00 |
|
|
2 |
(1 x |
5.00 |
= 5) |
|||||
|
3 |
(1 x |
20.00 |
= 20) |
|||||
|
Totals |
1 x |
2 + |
|
|
|
35.00 + |
9 |
= 44.06 |
This is the explanation and an example of the system calculations for a Work Order step using “Ea” (each) as the unit of measure.
|
UM |
Process Quantity |
Process Cost |
Line Item (material or process) |
Quantity to Process |
Unit Cost |
Total Material Cost per line |
Setup Cost |
Total Cost for the Step |
|---|---|---|---|---|---|---|---|---|
|
Ea (each - 1) |
The number of items to process in the step |
Multiply the Process Quantity by the Process Cost |
|
Multiply each quantity line by the Unit Cost to get the total cost of the material for each line. |
Add all material costs for each line in the step together for a total unit cost |
Add one Setup Cost for the step. |
|
|
|
|
3 |
2 |
1 |
(1 x |
10.00 |
= 10) |
9.00 |
|
|
2 |
(1 x |
5.00 |
= 5) |
|||||
|
3 |
(1 x |
20.00 |
= 20) |
|||||
|
Totals |
3 x |
2 + |
|
|
|
35.00 + |
9 |
= 50.00 |
This section explains the system calculations for a Work Order step using C as the unit of measure and provides examples. The “C” UM represents 100 units. To use C as the unit of measure, the system first determines a proportional amount of units to process. This proportional amount is then multiplied by the Process Cost, resulting in a total Process Cost associated with the C unit of measure.
The following tables demonstrate two different scenarios.
This table represents the C unit of measure for a Work Order step that is set to process a quantity of three. However, the C unit of measure corresponds to 100 units. The system determines a proportional processing amount to use when calculating the total cost of processing. In this example, the system further considers a single unit for each material line item to calculate the material cost.
|
UM |
Process Quantity |
Process Cost |
Line Item (material or process) |
Quantity to Process |
Unit Cost |
Total Material Cost per line |
Setup Cost |
Total Calculated Cost for the Step |
|---|---|---|---|---|---|---|---|---|
|
C (100) |
Determine proportional UM by the Process Quantity divided by the UM (100) |
Multiply one Process Cost to the proportional UM |
|
Multiply each quantity line by the Unit Cost to get the total cost of the material for each line. |
Add all material costs for each line in the step together for a total unit cost |
Add one Setup Cost for the step. |
|
|
|
|
(3/100) |
2 |
1 |
(1 x |
10.00 |
= 10) |
9.00 |
|
|
2 |
(1 x |
5.00 |
= 5) |
|||||
|
3 |
(1 x |
20.00 |
= 20) |
|||||
|
Totals |
0.03 x |
2 + |
|
|
|
35.00 + |
9 |
= 44.06 |
This table represents the C unit of measure for a Work Order step that is set to process a quantity of two hundred fifty units. However, the C unit of measure corresponds to 100 units. The system determines a proportional processing amount to use when calculating the total cost of processing. In this example, the system further considers two hundred fifty material units line item to calculate the material cost.
|
UM |
Process Quantity |
Process Cost |
Line Item (material or process) |
Quantity to Process |
Unit Cost |
Total Material Cost per line |
Setup Cost |
Total Calculated Cost for the Step |
|---|---|---|---|---|---|---|---|---|
|
C (100) |
Determine proportional UM by the Process Quantity divided by the UM (100) |
Multiply one Process Cost to the proportional UM |
|
Multiply each quantity line by the Unit Cost to get the total cost of the material for each line. |
Add all material costs for each line in the step together for a total unit cost |
Add one Setup Cost for the step. |
|
|
|
|
(250/100) |
2 |
1 |
(250 x |
10.00 |
= 2500) |
9.00 |
|
|
2 |
(250 x |
5.00 |
= 1250) |
|||||
|
3 |
(250 x |
20.00 |
= 5000) |
|||||
|
Totals |
2.5 x |
2 + |
|
|
|
8750 + |
9 |
= 8764.00 |
This is the explanation and an example of the system calculations for a Work Order step using C as the unit of measure. The “M” UM represents 1000 units. To use M as the unit of measure, the system determines a proportional amount of units to process. The proportional amount of units is then multiplied by the Process Cost. This gives you a total Process Cost associated with the M unit of measure.
This table represents the M unit of measure for a Work Order step that is set to process a quantity of nine thousand nine hundred ninety-nine units; however, the M unit of measure is for 1000 units. The system determines a proportional processing amount to use when calculating the total cost of processing. In this example, the system further considers two hundred fifty material units line item to calculate the material cost.
|
UM |
Process Quantity |
Process Cost |
Line Item (material or process) |
Quantity to Process |
Unit Cost |
Total Material Cost per line |
Setup Cost |
Total Calculated Cost for the Step |
|---|---|---|---|---|---|---|---|---|
|
M (1000) |
Determine proportional UM by the Process Quantity divided by the UM (1000) |
Multiply one Process Cost to the proportional UM |
|
Multiply each quantity line by the Unit Cost to get the total cost of the material for each line. |
Add all material costs for each line in the step together for a total unit cost |
Add one Setup Cost for the step. |
|
|
|
|
(9999/100) |
2 |
1 |
(250 x |
10.00 |
= 2500) |
9.00 |
|
|
2 |
(250 x |
5.00 |
= 1250) |
|||||
|
3 |
(250 x |
20.00 |
= 5000) |
|||||
|
Totals |
9.999 x |
2 + |
|
|
|
8750 + |
9 |
= 8778.998 |
Delete this text and replace it with your own content.