Subcontracting rates

How subcontracting costs are calculated, and consequently, how the subcontracting rate must be interpreted, depends on the Rate Base field in the Subcontracting Rates (ticpr1160m000) details session.

This field can be set to:

• Unit
• Hour

Unit

The costs or prices are calculated by multiplying the end item quantity displayed in the Ordered Quantity field in the Purchase Order Lines (tdpur4101m000) session by the subcontracting rate. Select this method if the subcontracting costs are directly related to the number of subcontracting items. The subcontracting costs are based on the gross input of the end items.

Hour

If the method is hour rate, the costs or prices are calculated by multiplying the estimated man or machine hours by the subcontracting rate. The estimated man or machine hours are calculated using the operation planning data such as gross end-item quantity, cycle time, and man and machine occupation.