Cost the work with positions, works and rates
The works on a bill of materials are what people and machines do to the materials. Each work has a cost, so a product’s cost includes labor and machine time and not only what you bought.
Set up the reference data once
Section titled “Set up the reference data once”All in Settings, under Operations:
- Positions: a worker role, such as Candlemaker or Joiner, with an Hourly rate. This is the rate every specification step on that position is costed at. You can cost a product before you know who will make it, and the cost does not move every time you hire someone. A position with no rate shows No rate on a specification line.
- Works catalog: predefined works with a cost basis, such as Assembly, Sanding or Coating. Picking one on a step fills in its cost basis and rate.
- Resources: a machine, a table or a room, with an Hourly rate for machine time and a capacity. Leave electricity out of the rate, because it is already in overhead. A table or a room usually has no rate.
Add a step
Section titled “Add a step”- Open the bill of materials in Production → Bill of Materials and go to Works.
- Click Add operation.
- Under Work source, choose From catalog and pick a work, or Own work and name it.
- Choose the Cost basis:
- Hourly: costed at a Position’s hourly rate. The rate is never typed on the step.
- Flat hourly: a rate typed on the step, with no position or contractor named.
- Piece-rate: a price per unit. The labor for one batch is the Piece rate times the Units per batch.
- Outsourced: a Fixed sum agreed with a Contractor.
- Enter the Hours (or the units), and choose whether quantities are stated Per batch or Per unit.
- Optionally choose a Machine.
The Line cost shows what the step contributes. A step with no rate says No rate, and the specification’s total is marked incomplete rather than treating the step as free.
Rates and what really happened
Section titled “Rates and what really happened”Two rates answer two questions:
- The position’s rate answers “what does this job cost?”. It prices every specification, every price built on cost, and the estimate for a production order with nobody assigned.
- The employee’s rate answers “what did this actually cost?”. When you assign a person to a step on a production order, their rate is copied onto that line and frozen there. That frozen rate is what the finished batch is costed at.
Pay, quality and time on a step
Section titled “Pay, quality and time on a step”On each step you can also set:
- Counts toward employee pay: logged labor accrues to the assigned employee’s payroll. It changes pay only. Product cost includes the labor either way.
- Needs a quality check: finishing the step on a production order opens a check. It never blocks the work.
- Consumes no labor: for drying, curing or setting. See Count drying and curing time without paying for it.