Manufacturing ‘Other Charges’ are a way of applying additional fixed costs to production specifications. These charges typically relate to “outside” work performed by an external “third party” or subcontractor as part of the process of making the finished product.
Some examples of Other Charge codes used by clients as part of their manufacturing specifications are:
- Printing
- Finishing/Coating – e.g. Painting, Powder Coating, Galvanising, Anodising
- Engraving/Etching
- QC/Testing
The main expense posting processes in the system that relate to Work Orders Charges (e.g. Purchasing and Accounts Payable Invoice & Payment entry) allow the posting of “actual” values to Work Orders for Other Charges. These values then accumulate for display and reporting purposes. These actuals are used to compare with your specification “estimates” to give you direct feedback on the accuracy of your finished product costings calculated in the Manufacturing system.
On Completion of the Work Order a recovery is posted to the P&L control account for the Value of the Charge for that Work Order. The P&L Control account is set either in the Product Group Control Pointers or on the Charge code Masterfile.
The P&L can then show a comparison of Charge costs vs recoveries. This is particularly useful when it is not practical to post actual costs to all works orders relating to a Creditors Invoice.
Example
You manufacture an item with materials costing $100, assembly labour costing $20 and coating by a 3rd part costing $10. The total calculated cost of the manufactured product is therefore $130 once you record the labour and other charges components in the Specification.
Minimum Requirements
It is not necessary to set up manufacturing other charges to create Specifications or Work Orders. But it is recommended in most cases so that you are generating a more accurate cost of manufacture.
Changing Established Data
You can set up other charges if needed at any any future point and start adding them to Specifications.
Panel Options
- Standard panel features
- Maintenance
- Views
- Audit – shows an audit of data changes made over time to the other charge currently being viewed
- Where used – shows a list of manufacturing specifications and outstanding work orders with the on other charge code currently being viewed.
- Reports
- List Other Charge Codes