This document describes how to automate the calculation of cost rates for most combinations of costing components and cost drivers, except subcontracting costs.
Company policy determines how often to update cost rates. Some companies review their cost rates every year, others every period.
Cost rates are defined for material overhead, operation costs, tool costs and other common costs based on a cost budget.
The cost rates are applied when you calculate the costs of a product and display them in a costing model. See Managing M3 Product Costing.
The following tables are updated: MCCODA (costing component data), MCMACO (material overhead), MCWCCO (work center data), MCTOCO (tool data) and MCPRCO (product overhead).
Select Accounts to Include in Calculation
For each department, or for the company in general, select a range of accounting identities and a percentage to determine the share to transfer from the budget. You do this in 'Costing Component. Connect Accounts' (PCS013).
You can define departments and ranges of accounting identities for the following costing components: A04 and A05 (material overhead), all B costing components (operation costs), all C costing components (tools costs), and all E costing components (other common costs).
Retrieve Costs from Cost Budget
Run 'Costing Total. Transfer from BUD' (PCS480) to transfer budgeted costs from a selected budget and budget period to M3 Product Costing. As a result, the cost that will be used to calculate the cost per cost driver unit (CDU) is shown as the 'Calculated amount' for each department in (PCS012). The cost driver determines what the units are, such as man hours or the number of punches of a machine that are required to produce an item.
What values are transferred from the budget depends on the departments and accounts you have connected to each costing component.
Calculate Cost Rate per CDU
You can start the automatic calculation of cost rates in the following ways. Once you have calculated the cost per CDU, the result for the costing component is shown as the cost rate in 'Costing Component. Enter Values' (PCS011).
|Material overhead||A04 and A05||Run 'CDU & Rate. Calculate for Material Overhead' (PCS440).|
|Operation costs||B costing components||Run 'Resource Driver. Calculate Rate' (CAS260). Note: This program has replaced the previously used 'CDU & Rate. Calculate for Work Center' (PCS450).|
|Tool costs||C costing components||Run 'CDU & Rate. Calculate for Tool' (PCS460).|
|Other common costs||E costing components||Run 'CDU & Rate. Calculate for Product' (PCS740).|
Alternative Method for B Costing Components
For the B costing components, there is an alternate method of retrieving cost rates using resource drivers from M3 Cost Accounting.
If you already have cost rates set, either manually or automatically, these rates will be overwritten if they have the same costing date and belong to the same costing type as the new rates.
Once the rate per CDU is set in (PCS011), you can review the results for the cost distribution keys you have selected by selecting option 12='Enter costing rates' for each costing component in (PCS010). The following program is then displayed:
You can adjust the cost rates manually.