Different cost categories are needed to support different production purposes. That is, the cost groups that are assigned to cost categories classify manufacturing cost contributions by operation resources and the type of activity, such as setup and run time.Įach cost category has its associated cost records and an assigned cost group. Cost categories are assigned to operations resources and routing operations to define hourly costs and segment cost contributions in a manufactured item’s calculated costs. Here we can define the ledger posting for each cost category.Ĭost categories apply to manufacturing environments that use routings. Step-4: Create Shared Category and Cost category Released Products > Open and Edit Product > Manage Cost Fast tab Step-3: Map Cost group to Released Products. Production Control > Setup > Route > Cost groupsĭepending on cost visibility requirement you should create required cost groups for all different types of costs.
Inventory Management > Parameters > Inventory Accounting To analyse or configure different cost component, we need to enable the cost control in inventory parameters. Step-1: Create Cost Group and enable Cost control. All these different levels and components can be defined as cost group and can be associated with the costing sheet. There are different types of cost groups we can define in system depends on the nature of the cost.Įxample: Company says that they want to see the breakup of manufacturing cost of the finished goods by different types like raw material cost, packing cost, sub-contracting cost, labor cost, machine cost, overheads etc. It also defines the nature of the cost in manufacturing process. So, in this blog we will be uncovering Cost group configuration and its important.Ĭost group is the classification of the different types of cost component contributed to manufacturing process. So, one of the major components for costing is “Cost group”. Now, in manufacturing process most important factor is cost, how we define the costing impact and how do we account this in financials. I have been thinking of writing on complete production cycle for so long, so this is the first part of the series.
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