Examples of subcontracting rates

The following data is used in the examples:

Subcontracting rate	$ 50
Subcontracting factor	2.5
Gross output	170
Man hours	Gross output * cycle time (hrs) = 170 * 0.1 = 17
Machine hours	Gross output * cycle time (hrs) = 170 * 0.2 = 34

Fixed amount by product

Gross output * subcontracting rate = subcontracting costs

170 * 50 = $8,500

Operation rate

Gross output * subcontracting rate * rate factor = subcontracting costs

170 * 50 * 2.5 = $21,250

Man hour rate

Man hours * subcontracting rate = subcontracting costs

17 * 50 = $850

Machine hour rate

Machine hours * subcontracting rate = subcontracting costs

34 * 50 = $1,700

Note

If the currency system is independent, which you can specify in the Companies (tcemm1170m000) session, two currencies are available in the Subcontracting Rates (ticpr1160m000) details session. The currency displayed in the Subcontracting Rate Multi Currency field, is the default currency linked to the currency system. In the Currency field, you can manually specify the currency of the supplier. This currency is used for the purchase order.