Now-a-days in the competitive world of manufacturing, customers have started to demand more services than ever before. It is important that the management not only controls its overhead but also recognizes how to allocate that overhead on products and report on the company’s financial statements.
New stuff: Create Invoice directly from Shipment Entry
Manufacturing overheads are also known as manufacturing support cost, factory overhead and factory burden; these are indirect factory related costs that are incurred in manufacturing process of any Product. Along with the direct material cost and direct labor cost, the manufacturing overhead must be assigned to each unit of product.
Following are the examples of manufacturing overhead:
1. Electricity cost at factory
2. Water consumption cost
3. Depreciation on factory Equipment Building
In Sage 300 ERP you can configure manufacturing overhead along with Material Cost. Inventory control module of Accpac ERP provides you facility to define Overhead cost.
Let see how we can configure Manufacturing cost in Sage 300 ERP.
You will get the Bill of Material Option in Inventory Control >> IC Items and price lists.
In Bill of Material you can define expected consumption of material in Detail. Manufacturing overhead/cost other than the material can configure in fixed cost and variable cost.
Fixed cost: It is a one-time cost that is same regardless of how many units you assemble of the Master item. Fixed electricity cost or water consumption cost.
Variable cost: This cost is cost of one assembly produces the build Quantity of Master item.
Labor cost per assembly, packing cost etc.
Stay with as we discuss ahead the financial impact of manufacturing overhead in our next post.
1. BOM Setup for Manufacturing Company in Sage 300 ERP
2. Using BOM and Assembly to Convert Items in Sage 300 ERP
3. Material Required to Assemble FG on order – Report
4. Simplify Assembly using Sage 300 ERP
5. BOM and KIT – Understanding the Basic Difference