Estimation cost is greater than Realized cost in Production order

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Posted on by munsif

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Dear Experts,

Hope you are Well! i have question regarding cited matter, we have some production orders in which estimation cost of item is greater than actual cost , while actual cost of item is same in work order as per item cost price, i had run inventory re-calculation and rest my work order also, but did not get any clue.We are using Weighted average method.

Please guide where might be issue.

Regards,

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Ludwig Reinhard Microsoft Employee on at

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Hello Munsif-ur Rehman,

Your estimated costs can be higher if the cost calculation made is old and was made at a time when prices were higher.

If your material / labor costs decreased over time then the estimate will still use the old ones and as a result your realized costs might be lower.

Other reasons for higher estimated costs can be related to a smaller actual consumption of materials or less time needed to produce.

You should be able to identify that from the production costing tab.

Best regards,

Ludwig

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munsif 1,536 on at

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Thanks Ludwig, for your prompt reply, actually only estimation cost of two items are high from realized cost amount while qty at both level estimation & realized are same, i run the re-calculation for that item, rest production order etc..and restart my work order but did not get any positive result.

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Ludwig Reinhard Microsoft Employee on at

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Hi,

Can you check things in the price calculation form for your production order?

Please see the following screenprints.

Please open the variance form by hitting the respective button shown in the last screen.

Best regards,

Ludwig

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munsif 1,536 on at

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thanks, Ludiwg, I am new at functional side, and the variance button as you described as disable with us,can you guide me where is missing in configuration or it is related to version. We using Ax 2012 R2.

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Ludwig Reinhard Microsoft Employee on at

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Good morning Munsif-ur-Rehman,

What is the status of your production order? Is is really ended?

If this is not the case then try to open the price calculation button/form.

In this form you have different tabs, such as overview costing and 'costing sheet'.

Can you go through those tabs and check what you see there?

This should already give you an idea what happened and why.

Can you possibly share a couple of screenprints from this form?

Many thanks,

Ludwig

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munsif 1,536 on at

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Good Day to You, Ludwig, the work order is not ended yet,

one thing more i just checked that some one has uploaded cost through journal in system and estimation cost i think system taken from there if i am not wrong! because when i post updated cost for specific item and rest work order , again estimate ,realized cost and estimated cost become same.

Now my concern is from where system taking estimate cost ?

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Ludwig Reinhard Microsoft Employee on at

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Hi Munsif-ur-Rehman,

The estimated cost is taken from what has been setup in your BOM and route.

Because the price difference for your article is extremely large, can you double check what has been setup in the item master and the BOM?

Best regards,

Ludwig

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munsif 1,536 on at

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Thanks, Ludwig, please find attached screen shot.

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Ludwig Reinhard Microsoft Employee on at

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Hi Munsif,

What is the last BOM calculation amount that was made?

Can you see that in your costing version?

Have you tried doing a new/fresh BOM calculation?

Once that is done, start a new production order to see whether this makes a difference.

It looks as if the original BOM calculation is just old and outdated.

Best regards,

Ludwig

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munsif 1,536 on at

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Thanks, Ludwig, You means that we should run Bom Calculation whenever we create new BOM, and currently we did not run any bom calculation because this is fresh system .

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