What Machine Burden Costs Are Based On
The final source of burden is machine burden. This is calculated based on the number of hours the machine is in use - both while it is being set up and while products are being run. As in the other burden cost calculations, the machine burden cost associated with set up is divided over the item’s order quantity. When there are multiple machines per operation, any machine setup burden cost is applied to each individual machine. This is most commonly used in a machine-intensive environment.
• Machine Setup Burden =
[(Setup Hrs / Order Qty) * Mach Bdn Rate * Machines / Op] / Item Yield%
• Machine Run Burden =
(Run Hrs * Mach Burden Rate) / Item Yield%
• Machine Burden =
Machine Setup Burden + Machine Run Burden
There is only one field for run time on the routing. It is not split into machine time and labor time. For burden calculations, the machine and the labor are both assumed to be in use for the entire run time.
Note: To report strictly by machine-based hours, an employee record needs to be created for that machine. Use Employee Create (36.1.7.1).