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Standard cost roll-up from the BOM

Work out what each item you make should cost, rolled up level by level. It counts its components, machine and labour time from the bill of materials, and your factory overhead. Keep each standard from a date, and print a cost sheet with office overhead, profit and a suggested price.

PLANSFrom Growth

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The problem it solves

A part's cost is a figure someone worked out years ago, before steel and wages went up.
Quotations are priced from a guess, and some orders lose money without anyone knowing.
Sub-assemblies are costed by hand, so one change in a component means redoing a whole sheet.
Nobody can say what the cost was last quarter, because the old figure was typed over.

How it works

Set your percentages once in Settings > Manufacturing, under Overheads and profit. They are Factory Overhead (10 % to start with), Office Overhead (5 %) and Profit (15 %).
Open Manufacturing > Products > Cost Roll-up. Pick items, or leave the list empty for every item with a bill of materials, and a Standard From date.
Press Work Out. For each item, the components are costed from their own bills of materials level by level; bought components take their cost on the item. Machine and labour time come from the steps on the bill of materials at each machine's cost per hour.
Factory overhead is added on material and labour. A new standard cost is saved per item, with material, machine and labour, overhead and the total.
With Use It Now on (the default), the new standard replaces the one in use, which becomes Old. With Set the Item Cost on, items whose category uses standard costing take the new total as their cost.
Print the Cost Sheet from an item to see prime cost, works cost, cost of production, profit and the suggested price.

Everything it does

The roll-up

Material: each component's quantity times its unit cost; made components are rolled up through their own bills of materials, up to 25 levels
Bought components and items with no bill of materials: their cost on the item
Machine and labour: the expected minutes of each step at the machine's cost per hour, per unit of the bill of materials' quantity
Factory overhead: your percentage of material plus machine and labour
Items: those chosen, or every item with a normal bill of materials in the Entity

Standard costs

Per item and date: material, machine and labour, factory overhead, standard cost, the bill of materials used, notes
States Draft, In Use and Old; Use It turns a draft into the one in use
One in use per item and Entity; older ones are kept, so the cost on any past date can be found
Changes are kept in each standard's history
Standard Costs list opens on those In Use; group by item

The cost sheet

Printed from the item, per unit
Direct material, machine and direct labour, prime cost, factory overhead, works cost
Office overhead at your percentage, cost of production, profit at your percentage, suggested price
The date of the standard used; with no standard yet, figures are worked out from the bill of materials on the spot
The actual cost per unit over the last 10 finished production orders, when there are some

Who uses it

Production ManagerRuns the roll-up, puts standards in use, prints cost sheets and sets the percentages.

PlannerCan read the standard costs.

AccountsUses the item cost the roll-up sets for items on standard costing.

Where you use it

Web: Manufacturing > Products > Standard Costs and Cost Roll-up
Web: Print > Cost Sheet on the item
Web: Settings > Manufacturing > Overheads and profit
Not in the SmartMy Manufacturing app

What you control

Settings

Factory Overhead: 10 % of material and labour, per Entity
Office Overhead: 5 %, on the cost sheet
Profit: 15 %, on the cost sheet
Cost Roll-up: Use It Now on, Set the Item Cost on, Standard From today, to start with
Per machine: its cost per hour

Questions

Where do the labour and machine costs come from?

From the steps on the bill of materials. It takes the expected minutes of each step at the cost per hour of the machine or station it runs on.

Can we keep last year's standard?

Yes. Each roll-up saves a new standard from a date. The one in use becomes Old and stays on record.

Does the roll-up change our stock value?

Only for items whose category uses standard costing, and only when Set the Item Cost is on. Other items keep their own costing method.

Is the suggested price on the cost sheet our selling price?

No. It is cost of production plus your profit percentage, as a guide for quoting. Your price lists stay as they are.

Who can see costs?

Standard costs, the roll-up and the cost sheet are for Production Managers. Planners can read standard costs. Supervisors and operators do not see them.

Related features

PLANNING, QUALITY AND COSTActual cost, variances and the cost sheetWhen a production order is done, its actual cost is worked out and set against the standard cost. It uses the material really used, the machine and labour time really spent and any job charges. The variances show per order and in a monthly report by item.PRODUCTION AND JOB WORKBills of materials, production orders and work ordersKeep each item's bill of materials with its components and the steps on your machines. A production order reserves the material, lays out the work orders step by step and puts the finished goods into stock at cost.SHOP FLOORWork in progress value and the cost of rejectsEach open production order shows what is tied up in it. That is components picked so far at cost, and machine and labour time booked at the machines' cost per hour. The WIP list adds them up for the month end, and each order shows the value lost in rejects and scrap.PRODUCTION AND JOB WORKEstimates priced by quantity, made into the item, BOM and quotationPrice a new job from its material, its steps on your machines, overhead and margin, at each quantity the buyer asks for. Send the estimate as a PDF; when it is won, the item, its bill of materials and the sales quotation are made from it.PRODUCTION AND JOB WORKStock value by stage: raw, made, at job workers, on hold, rejectedSee what your stock is worth as on any date, split by stage. The stages are raw material, made items, material at job workers, quality hold and rejects, and with Growth work in progress. Per plant, item by item, with each item's costing method.

See your shop floor on it.

Tell us what you make, how many machines and people you run, and how production is recorded today. We will set up a line with you and run a job on the terminal.

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