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Supply chain | Supply Chain Management, Commerce
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Labor cost charge as a piece rate to production

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Posted on by 68
Hi all,
 
I would like to understand how labor piece rates can be applied to production. 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, 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.​​​

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