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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Costing sheet Setup fo...
Microsoft Dynamics AX (Archived)

Costing sheet Setup for calculation using machine hour rates

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Posted on by Juergen Weber 107

Hello!

I have further questions concerning a possible calculation Setup in AX also concerning machine hour rate.
Once I have calculated the rate for certain maschines or maschine Groups, what is the best way to apply them to the calculation of the finish product?

a) Include the machine hour rate in a resource and then include the resource in a Primary or secondary work step of the routes of the finish product next to the work step for the direct Labor (direct costs) or

b) Setup the machine hour rate as a surcharge or rate in the costing sheet?

c) Can I Setup indirect cost per KG (weight of the material)?

d) How can we setup Special direct costs for production in the costing sheet?

e) If we calculate production costs (Herstellkosten) with the costing sheet which we want to activate as a basic Standard cost Price, should then be the surcharges for administration and sales be in included in the Profit Setup of the  cost Groups or calculation Groups respectively in order to determine the net costs (Selbstkosten).
And if we add the margin to the surchage percentage we could calculate the sales Price? Or is there a different way to achieve a parallel calculation of production costs and net costs?

Are there any other general recommendations to my questions or or best practise?

Another question would be if it is possible to implement an activity based costing or at least an activity oriented product calculation in AX? If possible is there a brief instruction possible how that could be implemented?  

Thank you very much!

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  • Juergen Weber Profile Picture
    Juergen Weber 107 on at
    RE: Costing sheet Setup for calculation using machine hour rates

    Dear Steven and Ludwig,

    Thank you very much for your answers. That was very valuable Input for me and will certainly help me a lot with the further detailed discussion in our customer Project.

    Kind Regards
    Juergen

  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Costing sheet Setup for calculation using machine hour rates

    Hello Juergen,

    @ a) I agree with Steven. From a cost accounting perspective b) does not make much sense as those costs are direct costs.

    @ c): I assume that you produce items in PCs and want to setup indirect costs per kg. As far as I know this is not something that is supported in the standard application and might require an adjustment.

    @ d): Also here I agree with Steven. Direct costs are usually linked to a cost group that can be included in your costing sheet.

    @ e): I am not sure what you want to achieve here. You have to be careful with the terms you use and what the government allows you to include in the cost price of an item. All standard setters (IFRS, US-GAAP, local GAAP) usually define in detail what can and what can't be included in the cost price of an item.  

    @ ABC-costing: Activity based costing (ABC-costing) is a completely different approach from what you asked before as it focuses on the indirect areas of a company such as accounting, sales & Marketing, etc. That is, the main focus is the overhead (fix costs) AX certainly supports the implementation of ABC costing but you have to make sure what you want to include and measure. Maybe you can clarify what your customer understands as a "activity oriented product calculation" as I cannot see any relationship to ABC-costing.

    All the best,

    Ludwig

  • Verified answer
    Weaveriski Profile Picture
    Weaveriski 23,616 on at
    RE: Costing sheet Setup for calculation using machine hour rates

    I would use a) over b) but it depends what the customer wants.

    c) Yes if you produce KG's then you could apply a cost category per quantity or use a rate Indirect. Depends upon the details and config really.

    d) depends what they are.

    e) that is not very clear - the costing sheet gives you the production costs and material costs (depends on net but also that) but the margin for the suggested sales price is based upon the costs, but you can alter this by the calculation group percentages at different levels depending upon the config.

    Activity costing is assigning the indirects to the activities that cause the overhead - so this is your route based costing and the configuration of the overheads based upon that.

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