Hi all! I would like to use Standard costfor all my manufacturing items but my costing method is FIFO for all items in the system. When I run Manufacturing \calc. Standard cost on the item card the cost is not good at all. It looks like “Routing” is not used in the formula. How can I have my standard cost for an item that will be manufactured" Ii’s important because, sometimes a sales representative ask for a standard cost of an item. Thanks Rosine
Hi Rosine, Is your routings and BOM certified. Also what is the setting on the workcenters, if you have “specific Unit cost” then you must have setup the unit cost on each routing line. Have you already fixed a unit cost (direct unit cost) on the work center. Have you entered any values in the RUntime field.
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Originally posted by rosine
How can I have my standard cost for an item that will be manufactured" Ii’s important because, sometimes a sales representative ask for a standard cost of an item.
Hi Rosine, Why don’t you use ‘Standard’ as your Costing method? When using this, you will get a correct Standard Cost calculation, based upon BOM and routing. Also important when using this is the Lot Size, which will have your Setup Cost divided. Actually, we use FIFO as costing method also, but want to change to Standard costing, because of the better comparative calculation you get in the Production Order and the variances are posted to different G/L accounts (take a look at your Inventory Posting Setup). Besides that, I think most manufacturing companies use Standard Costing as their costing method.
Hi all! We’ve discussed with the client and they would like to keep FIFO as costing method. Yes Prashant , I have all my settings ( certified routings, certified Boms, no specific unit cost) but the calculate standard cost is not working at all. It does not use my routings just the BOM. Standard cost will be use just to inform salesrep about the std cost of the item. So Any other clue?
Hi Tatiana If I take item 1000 in Cronus and calculate the standard cost as you propose it will tell me “x”, if I alter the routing and recalculate I get a new standard cost, and again if I completely remove the routing and recalculate I get a new cost again. I think this shows in 3.60 the routing is being taken into consideration. I would therefore presume that in the manufacturing set-up you have the “Cost Incl. Setup Field” unticked. This states:
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Cost Incl. Setup Field The Manufacturing Setup Table Here you can define whether or not the setup times are to be included in the cost calculation of the Standard Cost field. Place a checkmark in this field if you want the program to automatically include the setup times in the cost.
hi Steven! You are talking about item 1000 which is used Standard costing not FIFO. I dont have any setup time in my routings so I dont need to use that field. My fear is that when an item is used FIFO as a costing method, the calculate standard cost is not good at all. And How the calulation of standard cost is done when using routing type parallel instead of Serial?
You can still use the Manufacturing Standard Cost Calculation to do what you are looking for. Check the Requistion System…It must be set to Prod. Order (not Purchase). To follow up on Steven’s example, create a new Item (FIFO) and set the Routing/BOM to 1000 (Also set the Lot Size to the same value). The Standard Cost should now be the same as Item 1000.
Hi Tatiana Item 1000 for me is FIFO. Therefore all previous postings apply! [:D]
Thanks for your reply! I will test it again and let you know. My other question is: How the parallel type of my routing affecting the calculation of my standard cost?? Thanks again.
Hi Tatiana I have not tested this - and you will need to do so with a simple routing, but the fact it is parallel will not affect the cost - the run time and setup time will be calculated and costed - parallel routing will affect capacity and lead time of the product - not the cost (outside of the way a routing affects the cost as standard). I would be interested to hear if this was not the case.
OK guys! It works fine. In fact, my mistake was to put “purchase order” instead of “production order”. Thanks again