Re: outside operations costing

[Ruben Mirensky <rmirensky@xxxxxxxxxx>]

Chick Hi!

I think it would be better to find a work around and
not use the Outside Operation Functionality.

You could, for instance, create an item Anneal, type 6
(non-inventory balance).

Include 1 unit of Anneal in the BOM of the product you
are making with a Usage Code of fix quantity.

When you have a requirement for the product you are
making, that will create a requirement for Anneal.

Create a PO (or release 1 if you use schedule
contracts) for 1 Anneal at the cost of the heat
treatment operation.

If the run is greater than your standard batch size,
you will get a positive variance, if the run is
smaller you will get a negative variance.

There are other solutions, but they would entail
creating an intermediate item and it sounds to me that
it wont be worth it.  If you feel it is, let me know
and I will be happy to guide you with that approach
too.

Regards,

Ruben.
--- Chick Doe <Cdoe@barton-instruments.com>
wrote:
> here's the situation:
>
> bpcs version 6.1.2
>
> we cut a work order to produce some parts. one of
> the operations is a heat treat operation that
must
> be done outside. the heat treat vendor charges
us,
> not for the number of parts that he treats, but
for
> the each heat treat cycle that he performs. thus
is
> we send 1 part out he charges $200 (example
cost).
> if we send 100 parts out he charges ($200).
>
> questions:
> 1. how do we set the outside processing cost in
the
> routing operation record (my guess is to
determine
> the average number of parts processed at a time
and
> divide this into the lot charge to determine an
> average cost per part)
> 2. how do we write the OP Purchase order. we have
> been trying to figure out the actual cost per
part
> for each batch by taking the lot charge and
dividing
> it by the number of pieces being sent outside.
but
> because the number of parts changes from batch to
> batch., this results in numerous PO's for the
same
> process, each with a different PO price. (this
takes
> some persistence to explain to the accounting
> folks.) it would be nice if we could write the PO
> stating one lot for a total charge of $200, but
how
> would this interact with the work order qty
> completed?
> 3. how should we record the variance between the
> 'standard cost' of the op operation in the
routing
> record, and he actual charges from the vendor?
>
> thanks in advance, just another day in the
> interesting world of cost accounting!
>
> chick doe
> barton instrument systems
>
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