Intercompany trade scenario Labor

The intercompany trade scenario Labor is used to determine the intercompany trade amount that the department of the employee who books the hours charges internally to the department on whose behalf the hours are booked.

This scenario is also used as a Time and Material subscenario of the Subcontracting Depot Repair scenario.

Hours are booked in these sessions:

  • General Hours (bptmm1111m200)
  • Project Hours (bptmm1111m000)
  • Production Order Hours (bptmm1120m000)
  • Service Order Hours (bptmm1130m000)
  • Work Order Hours (bptmm1140m000)
  • Assembly Hours (bptmm1160m000)
  • Project (PCS) Hours (bptmm1170m000)

These price origins are available to determine the internal amounts for hours:

Supported price origins

  • Cost-Plus
  • Commercial Price

Cost-Plus

The cost plus amount is based on the actual costs of the hours specified in the hours related sessions in People. You can add a markup percentage to this amount in the Intercompany Trade Agreement (tcitr1600m000) session.

Note: For intercompany trade orders originating from service orders or work orders, the markup percentage is determined by the setting of the Cover Overhead Costs in Employee Department check box in the People Parameters (bpmdm0100m000) session. If this check box is selected, the markup percentage is based on the labor rate and the service overhead rate specified for the labor rate applicable to the employee. These rates are determined in the Labor Rate Code - Rates (tcppl0191m000) or Specific Labor Rates (tcppl0192m000) sessions.

Commercial Price

The commercial price for the hours spent on a project or an order by an employee is determined by the intercompany rate specified for the labor rate applicable to the employee.

Additionally, you can add an intercompany rate surcharge to internally book special rates for activities such as overtime, travel time, or training time. An intercompany rate surcharge is added to a labor type in the Labor Type - Surcharges (tcppl0131m000) session.

Example

An employee from another department is hired at USD 40 per hour for normal time and USD 50 for overtime. For overtime, an intercompany rate surcharge of 25% is specified to compensate the employee's department.

Labor rates

Labor rates (that include the intercompany rates) can be added to an employee, an employee’s department or trade group in these sessions:

  • Employees - General (tccom0101m000)
  • Departments (tcmcs0565m000)
  • Employees - Project (tppdm8101m000)
  • Trade Groups (tppdm0530m000)

To determine which of these labor rates is used to determine the intercompany rate for the current intercompany trade relationship and intercompany trade scenario, you can set the priority in the Search Path field of the Intercompany Trade Agreements (tcitr1100m000) session.

Intercompany rates for labor rates are specified in the Intercompany Rate field of the Labor Rate Code - Rates (tcppl0191m000) session.

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