Assembly Order Costing

Costing is a crucial aspect of the Assembly Control module. The manner in which costing is performed depends partially on how you define your cost components. Other aspects of costing that are described here are:

  • Transaction-processing methods
  • WIP transfers
  • Calculation of final results
  • Differences between Assembly Control module costing and Job Shop Control (JSC) module costing.
  • Where to view financial data in the Assembly Control module.
Note

The aspects of financial costing that are described here have no relation to the theoretical, mathematical costs associated with line sequencing.

Cost components

There are three types of cost components:

  • Materials
  • Operations
  • Surcharges

Cost components can be posted on an aggregated level, detailed level, or on a combination of aggregated and detailed level. When costs are posted on an aggregated level, all the costs for a cost component are combined into one sum, such as all the individual material costs being added into a single sum. To post cost components at a detailed level, you must define cost component charts. Detailed cost components result in a price structure in which all costs have been broken down.

Transaction-processing methods

The Assembly Control module is intended for use by companies that produce many variants of complex products in a flow-assembly line. Assembly Control can also be used for low-volume assembly if you select Order Based transaction processing. Select your transaction-processing method in the Transaction Processing field in the Assembly Control Parameters (tiasc0100m000) session.

  • Use Line Station Based transaction processing when you do not need to trace back to the original assembly order. Costs are posted to the assembly line. Results are calculated by period by assembly line.
  • Use Order Based transaction processing when you want your costing performed on the basis of individual assembly orders. Costs are posted by order by assembly line. Results are calculated by order by assembly line.
WIP transfers

WIP transfers consist of:

  • Generating the transfer order
    A WIP transfer generates a transfer order. However, if the transfer occurs between line stations that are in different logistical companies, a sales order and a purchase order are generated.
  • Performing the material issue
    A WIP issue may unblock or immediately process the transfer warehousing order, dependent on your parameter settings. In multisite situations, the normal sales procedure must be followed in order to ship the goods.
  • Performing the receipt
    A WIP receipt acknowledges the receipt of the WIP transfer order at a main assembly line that has received work from a supplying assembly line. Warehousing processes the inbound line automatically. If the assembly lines are from two different logistical companies, it is necessary to use sales orders and purchase orders (rather than WIP transfer orders). In multisite situations, the normal receipt procedure must be followed in order to receive the goods.

You can select whether you want these processes to occur automatically, semiautomatically, or manually.

Calculation of financial results

When you close an assembly line with the Close Assembly Lines (tiasc7220m000) session, the production results of the line are calculated. All the line station orders must have the status Closed. The financial results are the WIP transactions (which are estimated costs) minus the actual costs.

Differences between costing in Job Shop Control and Assembly Control
  • In Assembly Control, the quantity completed is always one.
  • There is no scrap and yield in Assembly Control.
  • WIP transfers are only created between different assembly lines, and not between line stations (of the same line).
  • There is no set-up time in Assembly Control.
  • End item unit costs (estimated material costs and hours costs for an order) are not calculated for an assembly order. This is not necessary because each end item uses the same assembly line, so there is no point in creating separate surcharges for each item.
  • In case of Line Station Based transaction processing, variances are calculated for an assembly order and not for a generic item.
  • Production results are not split into price variances and efficiency variances in Assembly Control.
  • Financial results in Assembly Control are posted to the cost component of the assembly line.
Where to view financial data in Assembly Control

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