Saturday, 1 March 2008

Capacity Cost

Capacity costs are the internal labor cost and machine costs. It can be setup in machine center and work center. The capacity cost also can be seperated into direct and indirect cost. Examples of direct capacity cost include building rental and insurance. Examples of indirect cost include lighting, heating and cleaning.To specify the capacity cost:

1) Open Machine Center Card (Manufacturing --> Capacities --> Machine Centers)

2) click on the Posting tab.

3) Enter direct cost in the Direct Unit Cost field. For example, $0.80

4) Enter indirect as percentage or fixed rate into Indirect Cost % or Overhead Rate field. Let's assume the indirect cost is fixed at $0.20, then we will need to enter 0.20 into the Overhead Rate field.

5) The Unit Cost field will be calculated automatically based on the value in the Direct Unit Cost, Indirect Cost % and Overhead Rate fields.

1 comment:

Anonymous said...

So is the work center where you set up the direct labor cost per hour then?

The machine center is for the overhead rate per hour?