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Evo-ERP and DBA Classic >> Manufacturing >> Collecting Engineering/Mgmt costs
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Message started by cathyh on 07/23/09 at 07:42:08

Title: Collecting Engineering/Mgmt costs
Post by cathyh on 07/23/09 at 07:42:08

We are selling a product for time and materials and are collecting time spent by our Engineers and Management staff that are normally not added to COGS. Does anyone else do this and if so can you tell me how you accomplish it?
My solution so far is to create a work center and a sequence without any labor costs so that direct labor is not absorbed. That way we can at least collect time spent by engineering and management. But wiht no costs the margin will be overstated.
Any help would be appreciated!

Title: Re: Collecting Engineering/Mgmt costs
Post by Dawn on 07/28/09 at 13:00:45

We don't do anything like engineering labor but we do a lot custom work. I use the WO-H Misc/Extra Costs often to add stuff that wasn't in the BOM.

Title: Re: Collecting Engineering/Mgmt costs
Post by Dennis Wilkinson on 08/03/09 at 05:43:25

Cathy, one method is to open an "Indirect" project work order with a sequence to capture labor and possibly a sequence to capture outside costs as well. Have all those employees whose labor hours you want to collect (note: you can use actual employee labor rates or capture hours and use composite rate from the work center for which the sequence(s) are assigned). This way, all labor and or purchase costs are accumulated within this project work order. When done, do a WO-H: Enter Misc/Extra Costs for a minus (negative value to an expense account or COGS). The work order can then be closed and the costs sent to the proper expense. Take a look and see if this will work for you. I have used successfully in the past.

Dennis

Title: Re: Collecting Engineering/Mgmt costs
Post by Lynn_Pantic on 08/03/09 at 08:33:40

Actually, if you create a type N part with the "WIP" account in the Item Class set up as the R&D Expense account (or whatever expense account you want) and use that part as the parent part on the WO, all the accounting is done automatically.

Title: Re: Collecting Engineering/Mgmt costs
Post by cathyh on 08/03/09 at 11:50:31

Thanks, everyone, for your input!!

Here is what I have come up with:
We are producing a prototype and are charging for time and materials. We have management level and R&D people working on this as well as our direct labor people. So while we want the direct labor absorbed as usual, we do not want the other hours to be absorbed that way( as direct labor). I thought of making a labor part number ( with a class code that puts absorbed labor in , say, the R&D expense account) that we could use to issue hours to the prototype work order, but the reporting is not as clear as the labor sequence report for our purposes, so I went with a work center with no labor cost and a sequence using that work center. This works for us as far as the producing a document that shows the hours worked by each group, (by assigning a sequence for each group). If we want to add costs to the work order we can do an adjustment as Dennis suggested by taking the number of hours reported and using a $$ multiplier for each group to enter Misc/extra costs in WO-H.

Thanks again for responding -- :D