| # Operation Rates (ticpr1150m000) Use this session to enter the operation rates for standard and project-related operation costs. Operation rates are used to determine the operation costs for an item. Select a price-calculation code, an operation rate code, and, if required, a project for which you want to maintain operation rates in the details session. Performance aspects The settings in this session could affect system performance and database growth. For more information, refer to Cost component setup Related topics Cost price calculation Operation rates Price calculation code Cost components in Manufacturing Project A collection of manufacturing and purchasing actions that are performed especially for a particular customer order. A project is initiated by a customer order for items having a To Order order policy. The purpose of a project is to plan and coordinate the production of these items. For a standard-to-order production, the project is only used to link the item with the customer order. Otherwise, a project can include: Customized item data (BOMs and routings) Project planning (activity planning) A budget is a special type of project. A budget is used to plan and estimate, not to carry out production. Price Calculation Code A specification of how a cost price, valuation price, or sales price is calculated. The code stores specific cost calculation data. The price calculation code that is defined in the Cost Price Calculation (CPR) Parameters determines the standard cost price. Other price calculation codes are used for simulation purposes. The price calculation code for customized items is stored by project. Example Specific operation rates Subcontracting rates Simulated purchase prices Surcharges Operation Rate Code A code that identifies operation rates (labor costs, machine costs, or overhead costs). The code can be linked to a task or work center. Each cost price calculation code can comprise multiple operation rate codes and associated operation rates. Related topics Operation rates Sequence The number that identifies a data record or a step in a sequence of activities. Sequence numbers are used in many contexts. Usually LN generates the sequence number for the next item or step. Depending on the context, you can overwrite this number. You can sometimes influence the numbering by setting the corresponding parameters. Type of Operation Costs The type of costs that the operation rate relates to. Rate The rate by man hour or machine hour. The rate that you enter is valid for the type of operation costs that you defined in the Type of Operation Costs field. Related topics Cost components in Manufacturing Cost Component A cost component is a user-defined category for the classification of costs. Cost components have the following functions: To break down an item's cost price, sales price, or valuation price. To create a comparison between the estimated production order costs and the actual production order costs. To calculate production variances. To view the distribution of your costs over the various cost components in the Cost Accounting module. Cost components can be of the following cost types: Material Costs Operation Costs Surcharge on Material Costs Surcharge on Operation Costs WIP Transfer Costs General Costs Note If you use Assembly Control (ASC), you cannot use cost components of the General Costs type. Default value The default value for this field depends on the Type of Operation Costs field. LN retrieves the default value from the Cost Price Calculation Parameters (ticpr0100m000) session. Related topics Cost components in Manufacturing Variable Cost Operation rate lines can contribute to either fixed operation costs or variable operation costs. Fixed operation costs are costs that are independent on the number of items produced. Variable operation costs are costs that depend on the number of items produced. In LN cost prices and valuation prices can be broken down into fixed costs and variable costs. If this check box is selected, the defined operation rate line is considered as variable costs. An operation rate that is considered as variable costs will always be included in FTP inventory valuation. If this check box is cleared, the defined operation rate line is considered as fixed costs. An operation rate that is considered as fixed costs will only be included in FTP inventory valuation if the Include Fixed Costs in Valuation Price check box in the Cost Price Calculation Parameters (ticpr0100m000) session is selected. Note The used valuation method for inventory valuation must be Fixed Transfer Pricing (FTP). If an actual valuation method is used, such as LIFO, FIFO, or MAUC, inventory valuation will include fixed costs as well as variable costs. In standard cost price calculation, it makes no difference whether surcharges are fixed costs or variable costs. The outcome of the cost price is not effected. However, LN can break down the cost Currency |