Capacity Costs

Hi folks! I simply have 3 questions about the navision manufacturing capacity cost postings and allocations. Those i’ve written below and i would warmly appreciate any answer or opinion on mentioned themes. Thank you in advance. The questions: 1 How is actual capacity cost calculated when applying standard and average cost methods? What is the procedure for adjusting capacity entries to equal actual costs accrued? 2 What are the relations between capacity journal and other application modules? 3 How are actual capacity costs accrued and allocated over output? How is nonmaterial cost registered for work centers and how then are they allocated over the output by cost elements (auxilliary material, labor, utilities, etc.)? Ute

Hi, Firstly, Capacity costing in navision manufacturing is not as detailed as you are expecting it to be. The calculations are based on setting in Workcenter, machine center, Item card, and routings. For standard cost, THe calculation of unit cost is = ( ((run time * Lot size) + setup time) * Unit cost on work center)/output qty this factor is added to the material cost from the Prod. BOM to calculate the standard cost. THen the actual is also calculated based on the output journal entries you post. and the output qty. In standard costing, the value calcualted above is always posted as incurred, the difference between the actuaal and standard is posted in the capacity variance account. For Average Costing Method, The actual is calculated based on the above calcualtion and added to the material cost from the consumption journal and posted to the account. THere is no variance in average costing method. The capacity journal is used to post non productive time, or work that cannot be added to WIP. Every thing other than that is posted to the accounts. Remember, when posting the capacity journal it will post to the same cost account as that of when you finish the production order. if you have set the “specific Unit cost” to yes then the above calculation will you use the unit cost per in the routing line. Then you have to manually use the allocation s in the G/L to move it from the direct cost applied account. Thanks, Best regards, Prashanth