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Business Central Capacity Costing Production Order Pt.11 of Production in Microsoft Dynamics 365


Business Central Capacity Costing Production Order Pt.11 of Production in Microsoft Dynamics 365

We are going logically through the steps, it’s a pretty important topic.    

We had created the standard coffee beans and if I look at that, we basically set up a costing method standard, for each pound is 3 dollars. If I actually go out of here and adjust the inventory using this new feature in Business central it brings up a window.   

Let’s say I want to bring this up to 200 pounds, so it posts automatically in the background the setup 200. Standard NAV or a BC user will be like hey what about the journals? this is kind of a quick feature and you can skip the journal in this one.  

Positive adjustment
So, if I go in here and look at the entries, I can see that there is a positive adjustment that was made, and it brings the balance up to 2,000.  This one here for 520 and it cost out 3 dollars each, so it didn’t matter what the last direct cost was, it didn’t matter what you bought it for last time. 

The costing of it when you do an adjustment is always 3 dollars because the standards cost is 3 dollars. It kind of simplifies things, obviously when you buy it at a different price than the standard cost that gets a little bit complicates. But as you are increasing quantities and decreasing quantities in your warehouse, you know losing things, finding things that all just 3 dollars easy.  let's go ahead and see how this affects the production order.  

Released production orders  
Let’s go into released production orders. I’m just going to create a new one here and we are going into the same process as we’ve done many times in these videos. I’m going to do it for 2000 pounds or we are making 2,000 pounds and I just refresh it, hit ok and now we got the production order. Let me got into navigate statistics. Here we can see the cost, so now it’s not just zeros like at the beginning of the videos just running around with quantities, we didn’t even care what it costs, cost if o course huge, now we have cost and the expected cost is 3,300, the capacity cost, that’s for material, the capacity cost is 1,000.

We have that in here, the total is 4,300 and the capacity cost is made of 1,000 minutes. So, we are estimating it takes 1,000 minutes to do this, and it’s a dollar a minute, 60 dollars an hour which takes to run this the person.   

Let’s close this out and post something, we go into the line and into production journal, this is kind of a handy screen to post both consumption and output in the same place. And let’s say we ran for one day, we used 500 pounds, we ran for one day which was 480 minutes and we were able to output 450 pounds, so we are going to be a little scrap factor there.  

So we go ahead and post this, you see that it's successfully posted, if I just get out of this and go home, into statistics, now we can see that we have actual costs, so we have now that we’ve used 1500, 480 dollars in the capacity. The total is 1980 we used 480 minutes deviation is this, etc.   

Once we actually finish this, we’ll see how off we are on these and you can make a deduction whether you are estimating or cost correctly or not. 

But the interesting part about this is that material cost is all costed according to standard cost. So you have already fixed the cost for all the materials, and now is just a matter of how much of it you used whether the actual is going to be different from the standard. We can get more into detail in further videos on that.  I hope you got something out of this.   

 We posted actual capacity, now we have capacity costed and standard cost in the production order. 

 

 

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