Manufacturing Routing Costing

Time Updates and Costing

When time is logged against an operation task for an assembly, NetSuite uses this time to calculate costs associated with the assembly. For example, when completion time is logged against an operation task, NetSuite generates the following accounting entries:

• Hours -time logged on a completion record

• Resources -sourced from the completion record

• Rate -sourced from the operation task record

The result of these calculations posts to the WIP account for the assembly. Costs can be one of two types: setup costs or run costs.

Setup Costs

Costs need to be logged for expenses related to setting up for an assembly run. These costs are defined on the operation task record and are based on time logged against the task.

For example, the operation task Staging defines costs on the Cost Detail subtab. One cost category defined is Labor Setup. Using this category on a task defines the following:

• The Labor Setup cost category record indicates the item Other Charge for Purchase -Labor Setup.

• The task record defines the fixed rate for using the item Other Charge for Purchase -Labor Setup at $30 .

• The item record for Other Charge for Purchase -Labor Setup indicates the Assembly Staging Expense expense account.

  Therefore, when you log time against the Staging task, the appropriate amount posts to the Assembly Staging Expense account. This amount is calculated as Expense amount =Setup time logged x Labor setup fixed rate.

  If 2 hours of time are logged against the Staging task, $60 is logged to the Assembly Staging Expense account.

Similar calculations are made for other categories that may be defined on a task record. For example, overheads (Overhead expense amount =Setup time logged x overhead rate).

Run Costs

Costs need to be logged for expenses related to processing an assembly run. These costs are defined on the operation task record and are based on quantity completed during the assembly run.

For example, the operation task Staging defines costs on the Cost Detail subtab. One cost category defined is Labor Run. Using this category on a task defines the following:

• The Labor Setup cost category record indicates the item Other Charge for Purchase -Labor Run.

• The task record defines the run rate for using the item Other Charge for Purchase -Labor Run at $65 .

• The item record for Other Charge for Purchase -Labor Setup indicates the Assembly Staging Expense account.

  Therefore, when you log time against the Staging task, the appropriate amount posts to the Assembly Staging Expense account. This amount is calculated as Expense amount =Setup time logged x Labor setup fixed rate.

  If 10 units are completed for the Staging task, $650 is logged to the Assembly Staging Expense expense account.

Similar calculations are made for other categories that may be defined on a task record. For example, overheads (Overhead expense amount =Run quantity logged x overhead rate).

Costing Lot Size

If you use Standard Costing and Manufacturing Routing and Work Center, the Costing Lot Size field appears on the assembly item record’s Locations subtab. The default value for this field is 1, and the minimum value for this field is 0.01.

If you also use Multiple Units of measure, the value is in base units of measure.

During the cost rollup process, NetSuite calculates the routing cost of assemblies as follows:

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