Dynamics Community Forum Thread Details

Labor cost charges as a piece rate to finished good

Hi all,

I would like to understand how labor piece rates that they manufactured during routing booking can be applied to finished items. In the documentation, it’s mentioned that we can create a route of type “Quantity” and assign a quantity-based cost category, but there is no information on how to register piece rate costs upon the completion of an operation in the route journal.

Scenario:

The route consists of multiple operations, each requiring a different number of workers to complete. For example:

Operation 1 requires 3 workers.
Operation 2 requires 5 workers.
Operation 3 requires 4 workers, and so on.

Each operation has a fixed piece rate:

Operation 1 has a rate of $10.
Operation 2 has a rate of $12.
Operation 3 has a rate of $15, etc.

When a worker completes work for a specific operation, they will earn the piece rate assigned to that operation. For instance, if a worker belongs to operation 1, they will receive $10 upon completion of operation and so on, and this amount will be charged to production as well. The same applies to other operations, with the corresponding piece rate being charged to production.

I need guidance on how to configure this setup so that piece rates are captured and costs are transferred to both production and payroll. Specifically, I would like to know how to register the completion of an operation based on quantity, ensuring that workers earn their piece rates, and how this information is transferred to payroll.

Please provide instructions on how to achieve this.

Categories:

Dynamics 365 Supply Chain Management

Hi Afzal,
Yes, you're on the right track by using Quantity-based cost categories in the route setup.
To capture piece rates per operation and have them applied correctly to production costs, here's what you can do:

Configure Cost Categories:
- Create a Cost Category for each operation and set the Costing Type to Quantity.
- Assign the appropriate piece rate (e.g., $10, $12, $15) to each category in the cost price setup.
Assign Cost Categories to Routes:
- In your Route operations, assign each operation its corresponding cost category.
- Set the Route type to "Quantity" to ensure the system calculates costs based on completed quantity.
Register Operation Completion:
- Use Route Cards or Job Cards to register quantity completed per operation.
- The system will automatically calculate the cost per worker per operation based on the quantity and assigned rate.
Production Costing Impact:
- Upon posting the route card/job card, these costs will flow into the WIP and finished goods costing, accurately reflecting labor charges per piece.
Payroll Integration:
- If you're using a third-party payroll system, you can create a process (e.g., custom export or Power Automate) to pull route journal lines where you capture:
  - Worker ID
  - Operation ID
  - Quantity completed
  - Earned amount (quantity × rate)
- This can then be passed into payroll for processing piece-rate-based wages.