Costing Work Centers

Costing work centers serve as an extra level on top of the planning work centers to make costing and planning more independent.

General

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

A costing work center can also function as a calculation office for the linked enterprise unit.

Settings

If you want to post your financial transactions on work center level, the Financial Transactions by Work Center check box in the Production Order Parameters (tisfc0100s000) session must be selected.

Note

If you post your financial transactions by production order, a costing work center is not required.

  1. Define a department of the Work Center department type in the Departments (tcmcs0565m000) session.
  2. Specify the enterprise unit to which the (costing) work center belongs in the Departments (tcmcs0565m000) session.

  3. Create a costing work center in the Work Centers (tirou0101m000) session with:

    • The Work Center Type field set to Costing.
    • An operation rate code entered in the Operation Rate Code field.
  4. 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 Standard Cost 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 Order (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 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.

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