| Examples of subcontracting rates |  |
| The following data is used in the examples:
Subcontracting rate | $ 50
Subcontracting factor | 2.5
Gross output | 170
Man hours | Gross output * cycle time (hrs) = 170 * 0.1 = 17
Machine hours | Gross output * cycle time (hrs) = 170 * 0.2 = 34
Fixed amount by product Subcontracting costs =
    gross output * subcontracting rate
= 170 * 50 = $8,500 Operation rate Subcontracting costs =
    gross output * subcontracting rate * rate factor
= 170 * 50 * 2.5 = $21,250 Man hour rate Subcontracting costs =
    man hours * subcontracting rate
= 17 * 50 = $850 Machine hour rate Subcontracting costs =
    machine hours * subcontracting rate
= 34 * 50 = $1,700 Note If the currency system is Independent, which is defined in the Companies (tcemm1170m000) session, you see two currencies in the Subcontracting Rates (ticpr1160m000) details session. The displayed currency of the Subcontracting Rate Multi Currency field is the default currency related to the currency system. In the Currency field, you can manually enter the currency of the supplier. This currency is used to generate the purchase order. Related topics Operation subcontracting without material flow support Subcontracting rates |