Costing work centers

General

Costing work centers serve as an extra level on top of the planning work centers to make costing and planning more independent. With the introduction of costing work centers, you can change an operation 's work center during production planning when the estimated costs are already frozen, provided the new planning work center has the same enterprise unit as the costing work center. As a result, when you change a work center, you no longer need to change all work centers in the operation set and recalculate the estimated costs.

A costing work center has the following advantages:

  • Provides more flexibility to update the planning manually.
  • Facilitates the ad hoc subcontracting of an operation.
  • Enables you to create one costing center for each enterprise unit.
Settings

To define a costing work center, take the following steps:

  1. Because costing work centers are only interesting if financial transactions are kept on work center level, select the Financial Transactions by Work Center check box in the Shop Floor Control Parameters (tisfc0100s000) session. If financial transactions are registered by production order, the following steps are not useful.
  2. Define a department of the Work Center department type in the Departments (tcmcs0565m000) session.
  3. Specify the enterprise unit to which the (costing) work center belongs in the Departments (tcmcs0565m000) session.
  4. Create a costing work center in the Work Centers (tirou0101m000) session with:
    • The Work Center Type field set to Costing Work Center.
    • An operation rate code entered in the Operation Rate Code field.
  5. In the Work Centers (tirou0101m000) session, create a main work center or a sub- work-center, which are also referred to as planning work centers, and link the defined costing work center to the relevant planning work center in the Costing Work Center field.
Note
  • The enterprise unit of the planning work center must be the same as the enterprise unit of the costing work center.
  • If a costing work center is defined, the costing work center's operation rate is used for calculation purposes. If no costing work center is defined, the operation rate that is used can be the work center's operation rate, or the task relationship's operation rate, as defined in the Type of Operation Rates field of the Cost Price Calculation Parameters (ticpr0100m000) session.
Functional explanation

When a production order is created, the estimated hours and associated costs are transferred to the costing work center that is linked to the planning work center. If no costing work center is linked, the estimated hours are transferred to the planning work center. If the estimated costs are frozen on a moment that is defined in the Moment Freezing Estimates field of the Production Orders (tisfc0101s000) session, the end item unit costs are calculated. You can view the end item unit costs by costing work center in the End Item Unit Costs (ticst0510m000) session. When the estimated costs are frozen, the WIP transfers are also calculated. The WIP transfers take place between the costing work centers.

Note

After the costs are frozen, the planning work center can change as long as the new planning work center has the same enterprise unit as the costing work center. The costing work center cannot change after the costs are frozen.

If you decide to ad hoc subcontract an operation and decide to use an external work center instead of a planning work center, the only condition is that the external work center is linked to the same costing work center as the other work centers.

Related topics