Key Concepts
Product cost calculations are based on information from a variety of sources. Some of the key pieces are:
• Purchased material, overhead, and other costs entered manually in Item-Site Cost Maintenance for purchased items
• Component quantity per and scrap rates entered in the product structure (BOM)
• Labor and setup rates entered for each work center
• Variable burden at each work center
• Manufacturing setup and run times entered on each routing operation
• Yield at each operation
• Subcontract cost per unit entered on each subcontracted operation
• Item order quantity entered in Item Planning Maintenance
• BOM and routing code entered in Item Planning Maintenance
Most of this information was described in the previous chapter and shown in the previous examples and exercises. The next steps are to roll up the routing and product structure costs, and move the current cost set to the GL cost set. Those three steps are covered on the following pages.
