Standard Costs can be thought of as the cost to manufacture a part under ideal circumstances, following the Manufacturing Route perfectly. This is used to provide a benchmark cost to compare with the actual cost that is being charged. It is recommended that Standard Costs is run every so often (maybe twice a year) to keep them up to date.
Running standard cost will feed the prices on the stock parts screen/raw material screen.
To get to standard costs:
Click on Stock.
Select Standard Costs from the list.
Click on Calculate Standard Costs from the Menu that appears.
If there are any saved calculations, they will be shown next.
Standard Costs can be run against BI, MA or RM stock types or any combination of these. Its possible to use the Quickbar to select a particular MA part.
Because the part I raised was an MA part, the following option is provided to allow the components of the part to be automatically selected.
By clicking on the "Select..." button on the standard costing page, a number of options are available, including "Select ALL parts".
Then any BI Parts can be selected. Here the parts that make up the MA part have been automatically selected (and any others can be selected too by ticking some manually or using the ’Select’ option again)
Then the Raw Materials can be selected in the same way.
Then the option to do the calculation is available.
The next screen shows which have been updated and which have errors.
If there is an error when clicking on ’View Narrative’ then the error will be listed.
Here is a selection of possible errors:
ERROR - Standard Cost EBQ not found
• On the summary screen of the Stocked Part, go into the EBQ: ’Setup’ button and enter an appropriate Standard Cost EBQ - it will default to the minimum EBQ.
ERROR - Preferred route not found
• Within Manufacturing Routes Check that there is at least one Route set up and ensure there it is set to ’Preferred’.
ERROR - Preferred Supplier not found
• The most likely cause is that there is no Supplier Price information entered. At the bottom of the Calculate Costs screen shown above, there is the ’Supplier Prices’ button that will go straight there without leaving Standard Costs.
ERROR - Standard Subcontract Price not found for Operation 10 - Sub contracted painting
• No price set up for the Subcontract resource mentioned. Navigated to relevant route number and zoom into 0 (column: Lead > IPC). Add preferred supplier, batch size and price. If batch size is higher than one, 'Use the smallest quantity break for smaller quantities' must be ticked. Run standard costs for relevant part and it will update successfully.
ERROR - Costing price break not found
• There is no Purchase Price set up for the quantity required. It might be that one hasn’t been set up or that the ’Use the smallest quantity break for smaller quantities’ has not been ticked if relevant.
ERROR - Unable to recalculate Standard Cost for component - MA ’24140SUB 24140 SubWO test’
• This means that there is a problem with one of the components, meaning there will be an error showing on the screen above for the part mentioned.
• The errors can be corrected (for example, by pressing Ctrl & F5 to go into the Stocked Parts screen) and then ’Recalculate’ can be selected while the relevant item is highlighted.
• Clicking on ’Next’ will then actually update the Standard Costs.
• It is possible to get a report of the details by using the ’Report’ button at the bottom left.
For example, The offending component is a PA - Phantom Assembly and cannot recalculate a zero value from current standard cost.
Please delete the PA from assembly maintenance and then run standard costs:-
Select Production
Assemblies / Bills OF Material
Type the relevant manufactured part and hit enter
Press Ctrl + M to modify
Select row for the phantom component and press F3 to delete
Add the £0.25 fixed charge via the supplier for the manufactured part
Press Ctrl + F5 to load stocked part maintenance and F6 to stock summary window.
Click Show Supplier prices and enter the 0.25 p charge.