Business Central Capacity Cost Shares: Pt.10 of Production in Microsoft Dynamics 365
We are in production getting deep into this topic. It is a serious topic so there is really no way to do this without diving deep. We were costing so I’m going to run into that right away.
If I go into items, I go into my standard ground coffee item, I have set this up to be standard cost or standard costing method and standard cost is 3.30 and the last video I went through the standard cost worksheet and I rolled up the cost and it included scraps, so the ingredient was 3 dollars, 1 for 1 and then its 10% scrap which means the cost of the item is 3.30.
Add capacity to the cost
I’m actually going to show you a few cool things here, I’m going to add the capacity to the cost as well. If I go into Navigate here, there is something called cost shares, this is cool If I click on this, I can see the breakout or the shares of cost. So, for this standard ground coffee, for one coming out of that, 1 pound, in this case, I need 1.1 pounds of coffee beans because of the scrap percentage.
So, we can see that the cost for scrap is 30 ad cost for the pound of coffee beans was 3, so we have the total cost 3.3 and that rolled up to here, so obviously if I had more lines here, it will roll up more but I just have one. What I’m going to do now is add the capacity cost, because of course, the material cost us money, but the time of doing this is also a cost that should be factored in. I’m going to go in here. Close this out.
I had not added a routing into this but I do have a routing, that we created in a previous video its called grind coffee. Before I go into that I want to edit it. this is the grind coffee, the setup time I’ve actually set to get this going is 10 minutes and the run time is 1 minute. I’m going to say the setup time is Zero, just to make this simple, run time is 1 minute for 1 pound. Make this under development so you can't change this until you put it under development, et up time zero and then I change it back to certified.
Also what I want to do is go into the work center here and in the work center I can set up a cost, so on the work center itself, I say how much does this cost me per unit of time, and my unit of time is minute. In this case, it cost me 1 dollar a minute to run this. So, 60 dollars an hour, this is a really powerful machine it grinds 1 pound in 1 minute. So it's fairly effective.
So I set that up here, I could, of course, put an indirect cost but I’m not going into that yet. So I close this out, hit ok. Out of this and ok here, now I have assigned the routing grind coffee in here, now what happens if I go into my cost shares? If I go in there, I can see that grinding coffee has been added and now my total cost here is 4.30 because I had 3.30 for the material and then I have a dollar for the capacity. So that is already updated.
If I look at the card itself right now, I can see its still at 3.30 because even though I changed the underline cost, the actual finished good is not going to immediately change, you have to execute that change. And there is a reason for that, there might be open entries in the system that have this cost assigned to it, so if you change the underline parts you have to do a formal roll up with worksheet. I’m going to show you how that would be.
Formal roll up with a worksheet
Go back to the standard worksheet, just note this is something I was playing around with, I have a few lines; if you wonder how to delete many lines at once, like in older systems you would just highlight everything and hit delete, but you can’t do that o the web and in the could system, so what you have to do is go in here, select more, click the top part and hit delete, then it works, that a note on that; I’m going to go ahead and suggest a standard cost, just find the item.
Here it comes, so we can see that it comes up with the old cost and if we do a roll-up standard cost and do it again just for that, just filtering so it doesn’t take everything in the system. Now I can see that the rolled up cost is 4.30 and then I just hit implement standard cost changes and that updates the cost to 4.30, so now you can see we added capacity cost to this, updated through standard cost worksheet and now we are going to go into actually posting something in the next video, where we see how this posts into accounting and even deeper. I hope we have everybody still on board.