production posting question in AX?

From the link…/aa496407.aspx


If the standard method for calculating the cost of the finished item was used, the final transactions also reflect this. If there is a difference between actual costs and costs calculated using the standard method, it is posted to the account showing profit or loss.

What does the 'Standard method" refer to here? Is it Standard Cost Model (Inventory Model)? Does the profit or loss refer to fixed receipt price profit or loss? Does the above apply to FIFO?

This is related to standard cost. The difference is posted as variance. The fixed receipt price will not be applied to standard costing

Here the total cost of production depends on the route/item consumption, overheads. But the using the Fixed price receipt will have an impact, which will result the fixed price profit or loss

You have to be very very careful believing what is written in the help.

Thanks adam and Kranthi, appreciate it very much for your clarifications and I agree to your comments as it is not very clear from the help.

Typically, I use a planned costing version under FIFO, (thanks to adam for clarifying this to my earlier posts) and run the BoM price calculations and activate the planned costs and sales price. {Note: for procurement items, I sometime activate the fixed receipt price and when I set up the fixed receipt accounts, and activate the same in the purchase posting profile, it captured the PPV in the profit/loss accounts correctly}. However, I would caution using this in a mix of all three prices activated for an item as I got mixed results may be perhaps I ran test in a sample data.

two related questions:

Costing overview gives me a picture of what the estimated and realized consumption is after RAF and when I end the production. However, I got bit confused when I set up a BoM as below:

Parent BoM with 1 raw of qty 2; Route of 5 hour at the rate of $50/hr; raw is $50 per item;

sub-BoM - 1 raw component; 1 route - 2 hours at same rate; OVH is proportionate to manufacturing @ $10/hr rate. raw is 40 per item;

When I created a production BoM for the parent, the route came up to twice the cost, which is $500 instead of $250 but when I looked at the component it is 2 so it made sense. two questions 1) if I increase the number of resources, does the production time come down as I am using operational scheduling with infinite.

The cost of sub-BoM, the price showed up correctly which is per qty. This cost is rolled up in to the Parent BoM when i ended the production order,

Okey. But If I run the master planning, I get two planned production order 1 for Parent BoM and another for Sub-BoM. So when I complete the production for Sub-BoM, the cost is accounted for it and when I finish the parent BoM the cost of that is accounted. But I see a situation where Sub-BoM cost will be accounted twice. I hope I am wrong.

II) So far, in order to decipher the manufacturing cost and the difference between planned and actuals, what I am trying is to create separate accounts to capture during WIP stage and when I end the production. that way, I may possibly compare with these two accounts and get the price difference say when I post the job or route card with different times/cost. Costing sheet does show me the difference as well but is there any report where I can see the planned and actual costs?

Thanks again for your clarifications. please correct/update my understanding

If it takes 2 hours for one resource and you say 2 resources are needed you are in fact saying it is 4 hours. If you increased the resource to 2 but it takes 2 hours you would need to set the time to 1 to cost correctly.

The cost of a sub-BOM is not consumed twice, the RAF books it into stock, so you have issue, receipt, issue.

No I believe you need to write your own reports apart from the cost and analysis reports.

Hi Adam, thanks for the answers. Actually, the question is what if we add more resource given we estimate that it takes say 2 hours to complete a route operation with one resource. If we add more resources, will the time take to complete the operation reduce by 1 Hour assuming resources utilization is 100% (we only use operational scheduling at the moment)

Change the quantity of resources from 1 to 2 - the system will ask you if you want to halve the run time, if you do not it will leave the run time as original and therefore from a costing perspective you have doubled the time as you have confirmed the time to run is 2 hours and you now need 2 resources (at 2 hours each) so you need 4 hours production time.