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The Cost Module is responsible for estimating and tracking the costs associated with the manufacturing process.

Both fixed overhead and variable overhead methods and a wide range of cost drivers that can be applied job-by-job, step-by-step to work in process are supported. Overhead methods included as standard:

  • Percentage of direct labor costs.
  • Rate per man hour of direct labor.
  • Rate per machine hour.
  • Rate per unit of production.
  • Percentage of direct material cost.
  • Rate per unit of direct material.

Manual and custom overhead methods may also be used. When linked to ALERE Accounting different WIP and Variance Accounts can be specified for each product class. Separate fixed and variable overhead methods may be assigned. Overhead methods may be established by product class. A labor grade file maintains individual employee numbers and their rate per hour.

Each labor grade uses a $STANDARD employee which is the average rate for the labor grade and is used to prepare quotes or for projected costs. An employee may be entered for each labor grade for which they qualify. This allows different rates per hour to be used according to the work an employee is performing.

Each operation step on a Master Route can have a labor grade assigned independently for setup and for cycle time. In this manner, ALERE Manufacturing can distinguish the cost of setup separately from the cost of production.

Cycle time has a percent field which allows ALERE Manufacturing to account for an operator running more than one work center at a time. The Planned Cost process provides a way of calculating the cost of an item manufactured in various quantities across different routes. Common uses of the Planned Cost process include

  • Establishing economical lot sizing
  • Determining optimum routes to manufacture an item.
  • Establishing a way to validate an inventory standard cost using the current routes.

The Planned Cost function projects the material, labor and overhead costs of manufacturing an item in a specified quantity using a designated master route.

The Work Order Cost function provides a snapshot of job costs and allows a comparison of those costs to saved/quoted costs. The Work Order Cost screen displays

  • The WIP costs of completed steps.
  • The projected costs to finish the job.
  • The total costs for the job.
  • A breakdown of how the costs are distributed.
  • The cost per unit or for the total job.

The current work order costs are automatically calculated each time the screen is displayed. A Costed Roll Up screen permits you to view current costs side-by-side with rolled up bills of material. Drill down and see how the numbers were computed for any BOM. An Export button allows you to name and save the costed roll up information to an Excel spreadsheet.

You can choose which items are to have their average or standard costs updated in inventory when you are integrated with ALERE Accounting. Print a report of suggested changes when you are integrated with an accounting package other than ALERE Accounting.

Override suggested cost changes with your own. Journal entries are automatically made to account for inventory valuation adjustments. A Work In Process report permits up to the minute reporting on the value of WIP. WIP can be broken down by material, labor and overhead and by the type of order:

  • Assemble
  • Build
  • Maintenance
  • Rework
  • Work Order

The detail of the WIP reporting can include showing costs by route step. The As of WIP report allows looking at WIP value for a specific date.

A Variance Analysis report allows you to compare a job’s cost performance to its quoted costs. The variance reporting can be done on in process or completed work orders.The variance reporting can be done for material, labor and overhead costs right down to the route steps.

An Average Cost report will calculate the average material, labor and overhead costs for an item over a specified period of time.

As part of the process of finding average costs for an item, parameters may be set that will exempt costs that are below a certain amount or above a certain amount. This allows out of the ordinary costs to be excluded from the average cost calculations. The ability to find average costs has several important advantages:

  • Since the costs can be calculated down to the operation route step, there is a tool to analyze the effectiveness of the manufacturing procedures.
  • Trends over time can be developed.
  • The average cost information can be used to set prices when negotiating with a customer.
  • The information can also be used to determine cost standards.

Other Applications

The following applications are designed to work hand-in-hand with Cost:

"Cost" is part of the ALERE Manufacturing line of products, developed by TIW Technology.

Related Products

The following software product lines are also offered by TIW Technology: