Labor and Overhead Costing

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Posted on by Rosey

Hi All,

We use weighted average for our inventory costing method. We would like to be able to account for labor and overhead in our costs of good sold. We do not necessarily want to use routes in the typical sense-where they will affect our production scheduling capacity, we only want to use them to be able to book time=costs against a production order, so that these costs will be reflected in our costs of good sold.

Can anyone tell me what would be the simplest way to set this up in AX 2012 - we want no unnecessary setup which will complicate things more than they need to be. Is this even possible with weighted average?

Thanks,

Rosey

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Tim Schofield on at

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RE: Labor and Overhead Costing

The costing sheet is based upon cost groups assigned to the coast categories.

The costing sheet does a couple of things:

It controls the format of the costing sheet display on the production order price calculation and item price calculation forms (so you can display your costs split materials / labour / overheads),

and it allows you to specify overhead based on those cost groups.

Setting up the costing sheet isn't particularly easy - there's no way to describe it in a forum like this.

Tim
Rosey on at

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RE: Labor and Overhead Costing

Hi Tim,

For setting up overhead costs using the costing sheet, how would I set this up. We do not want to add manufacturing costs/purchase costs to the sheet do we?

Rosey
Tim Schofield on at

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RE: Labor and Overhead Costing

On each route operation there are three Cost categories which can be used to assign cost to operation: Setup; Run; and Quantity. If you don't want production scheduling capacity then you could use a zero run time and just apportion manufacturing costs as a 'Per piece' cost using the Quantity Cost category. You can add overhead costs via the Costing sheet. It'll work with weighted average costing. Another option (if you want to use setup and run times without capacity scheduling) is to look at the setup on the Route group and switch off capacity reservations.