# Machine Center Cost Calculation

Hi, In Manufacturing module, Machine Centers are linked to Work Centers and some basic definitions like shop floor calendars are defined on work center cards. Depending on this information I hoped that Unit Cost Calculation field (which is defined on work centers) applies also to machine centers. Therefore, our case is like this: -we used machine centers in routings -we filled the cost fields (direct cost, overhead rate…) on machine centers. -unit cost calculation is set to “units” on related work centers When the production is finished and the production order status is changed to “finished”, it is seen that the cost values are multiplied by the total time rather than total units of production. And also, if a run time value is entered in the output journals, this is also added to production order cost as an additional cost. Let me define it with an example: Unit cost calculation on work center : Units Unit Cost on machine center: 10 Run time on routing : 1.2 min Total units of production : 100 Run time entered in output journal: 15 min Then the cost of machine centers is calculated as (10 * 1.2 * 100) + (15 * 10) = 1350 When we use work centers in routings, the result is 10*100 = 1000 I hoped that both cases would give the second result. Is it normal? Or do I miss something?

Hi Didem What version are you running? In 4.0 the cost of the machine centre would be calculated as follows: This machine centre is always costed on unit of measure of the associated work centre. If I presume the UOM of your work centre is “Minutes” then the Direct Unit Cost of the Machine Centre is based upon each minute used. Therefore in your example the machine centre cost is 10.00 therefore if I made 1 and it took 15 minutes the cost attributed to the machine centre or this process would be 1015=150. The costing is different with a machine centre, is the unit cost of your item 10.00? As you are basing your costing through your work centre on units rather than time the 15 minutes run time becomes irrelevant and it will take the unit cost of the item and multiply it by the quantity produced. So your cost through the work centre would be 100unit cost, which if it was 10 would be 1000.00. I do not believe you have missed anything, it is just a case that the costing of the machine centre surprised you! [:D]