Definitions

Net Weight

Refers to the actual weight of a product, excluding any packaging materials, containers, or other non-product elements. It represents the weight of the product itself. The Net Weight field is located on the item card, under the inventory section.

Production Order Statistics

Provides a comprehensive overview of key performance indicators (KPIs) and metrics related to a specific production order. This page allows users to monitor and evaluate the financial and operational aspects of a production order, offering insights into cost breakdowns and variances.

Material Costs

The cost of raw materials used in the production order. Typically, the material cost is derived from the direct cost of the components consumed in a production order.

Capacity Costs

Costs related to the use of production resources, such as labor and machinery. Typically, the capacity cost is derived from the direct cost of the capacities (work center/machine center) used to produce an item.

Subcontracting Costs

Expenses incurred from outsourcing parts of the production process.

Overhead Costs

Indirect costs associated with production, such as utilities and maintenance. These include:

Manufacturing Overhead Rate

Manufacturing Overhead Rate (also known as Overhead Rate on the Item Card) represents the indirect costs associated with production that are not directly tied to specific products but support the overall manufacturing process. These include costs like facility utilities, maintenance, indirect labor, depreciation on manufacturing equipment, and other costs that facilitate the production environment. By applying these rates, companies can allocate these indirect costs proportionally to each product or production batch, helping to accurately calculate the true cost of goods manufactured.

Item Indirect Cost %

Specifies a percentage that represents the additional indirect costs associated with producing a specific item. These indirect costs could include handling, warehousing, inspection, and other ancillary expenses necessary to bring an item to its finished state but aren’t directly tied to the raw materials or direct labor for that item.

Capacity Overhead Rate

Capacity Overhead Rate (also known as Overhead Rate on the work center/machine center Card) refers specifically to costs associated with the utilization of production resources, such as machinery and labor, based on the time these resources are actively used in production. These rates focus on the capacity of the production resources and are calculated per time unit (like per hour or per shift) or per unit produced.

Work/Machine Center Indirect Cost %

Represents the costs related to using specific work/machine centers in the production process. These indirect costs might cover maintenance, electricity, setup time, and other operational expenses required to keep a work/machine center running efficiently.

Cost Categories

Because some of these costs can consolidate several elements (e.g., indirect costs can include labor as well as real estate costs), all the above-mentioned costs can be broken down into cost categories that provide better insight and detailed views of the costs affecting a production order.