Labour as element of standard cost

Our license prevents us from addimg routing link codes to our Production BOM lines. Does anyone know of a way to place a standard labour cost against components or the Top level item, and have this cost be included in the std. cost roll-up? Thx. Sheina

Hi Knowlton Without routing you cannot really accomplish this, In the standard inventory BOM you can assign a resource into the Bill and roll it up in this manner. Your only real option would be to create a labour item and add this into the Bill so the cost gets rolled up. In many manufacturing industries where labour, indirect and direct overheads are not costed separately the standard cost of the individual items contain elements of each of these from the manufactured perspective. Are you sure the standard costs do not already contain these elements rather than a simple roll up of actual costs?

Thank you for your ideas. If I were to create a ‘Labour’ item and add it as a component to the Production BOM. This would force me to have to consume the labour item. On finishing the production order is there a way to seperate variance based on component. I am sure that the current standards do not include labour. Sheina

Hi Sheina, If you use Manumacturing it is better to setup Routing for the item. In this case system will automatically calculate labor variances based on labor hours and cost posted in output journal.

Sorry Shiena, you really have to make the purchase. Its like buying a car that does not have airconditioning installed, then you go back to the dealer and say “I’d like a way to make my car cool in summer, but I don;t want to pay for an airconditioner.” an answer might be “…well you could roll the window down, but it isn’t really the right solution…” I know that it always seems a bit un fair that you have to keep buying these granules, but it is mportant to realize that one of the reasons that Navision is so affordable, is through the mechanism of only having to buy what you need. In reality it is a very fair pricing scheme.

Check your item record for the overhead rate field (might not be visible on your item card but have a look with the zoom). This is a fixed amount that is added per base unit of measure. Put your labour cost in there, either on the components or the finished item or both. It should get included in the standard cost calculation. Cheers, John