The set of formulas for the Manufacturing Workflow Cost Roll Up is the following (This has been taken from the description field of Manufacturing Management || Standard Costing Management || Workflow Cost Roll-Up):
Labor Cost Operation = (Setup Time / Qty Batch Size) * Duration * Labor Rate to this Resource
Overhead Cost Operation = (Setup Time / Qty Batch Size) * Duration * Overhead Rate to this Resource
Labor Cost Workflow = Sum of every the Labor Cost Operation
Overhead Cost Workflow = Sum of every the Overhead Cost Operation
Cost Workflow = Labor Cost Workflow + Overhead Cost Workflow
IF we assume the following set of units for the corresponding variables:
Labor Rate to this Resource = $/min,
Duration = min,
Setup Time = min,
Qty Batch Size = lbs
Labor Cost Operation = (min*$$) / Lbs.
Why are the units for this operation defined as such? Is their a mistake in the unit assumptions I made?
Victor Perez Juarez
A manufacturing workflow can be defined in different time units (Hours, Minutes, Seconds) this allows you to define operations in the most appropriate according to the process.
The Manufacturing resource is defined with a unit opración per hour, So the system performs necessary calculations to convert from duration unit to hour and these are multiplied by the hourly rate.
The Great Victor!
Thank you for time!
So now I wonder the following:
1. How do I define the operations per hour for the Manufacturing Resource?
2. How do I define the Hourly rate for this resource?