Machine Operations

An Example of using Machine’s to include an ‘Cost Rate’ into a Works order / Sales Order.

Open

The Machine here is called ANODISING.

Open

We have a calculated cost per hour of $120 with a Charge Out Rate of $250.

Add Machine to a Works Order

We have added ANODISING to a Works Order, we are needing to run these 40 items through the ANODISING bath once, all at the same time, So the Qty = 1.

You can see our run through the bath has a Cost of $120.

Here you can see the Labour & Machines on the front screen of the Works Order. The Labour is the 1 hour of annodising time @ $38.45 per hour.

Time Sheet Entry

Here is the time sheet associated with the Anodising, you will notice that the Estimated cost is $158.45. That is $120.00 of machine costs, plus the labour @ $38.45 per hour.

Also notice that we have updated the Production Quantity of the Anodising at the bottom of the Time Sheet. This gets transferred to the Works Order.

Back on the Works Order we can see the time sheet has updated the Totals on the front screen. You can see that the Actual Labour is $26.00 not the $38.45. The $26 is what the guy actually get’s paid.

TimeSheet Posted - GL Entries made

If we have a look at the Timesheet entries that were made in the General ledger we can see the following:-

Stocking of the Works Order

Due to the way this client’s system is set up, we are using the Estimated Cost (not the Actual cost) for any Manufacturing Stock (Stock transfer from WIP).

So upon Stocking of this Works Order $1204.36 (being the ‘Estimated Cost’ will be transferred from Work In Progress into Inventory.

Conclusion

You can use Machine Operations to better reflect the ‘perceived’ cost of an operational step. The system (in this case) will continue to use the estimated cost from the Works Order, but the estimate now reflects the cost rate. This flows through to any linked Sales order.