<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/ti/onlinemanual/000188" xml:lang="en">
   <Header>
      <Title>Calculate estimated end item unit-costs of a production
		order</Title>
      <Keyword type="header" order="d1e2093638">
         <Level1>Calculating estimated end unit-costs of a production order</Level1>
      </Keyword>
   </Header>
   <GeneralSection>
      <Paragraph>The end item unit costs
		are the planned costs of one end item for a specific production order. LN calculates the end
		item unit costs by means of the estimates for hours and materials (item
		surcharges included). The calculation of estimated end unit costs of a
		production order is described in the following paragraphs.</Paragraph>
      <List>
         <ListIntro>LN calculates the estimated end unit costs when:</ListIntro>
         <ListItem>You change the production order status. <List>
               <ListIntro>Depending on the value of the <GUIRef href="/baanerp/ti/sfc/tisfc0101s000#tisfc001.mfre" role="manual">Moment Freezing Estimates</GUIRef> field in the <GUIRef href="/baanerp/ti/sfc/tisfc0101s000" role="session">Production Orders (tisfc0101s000)</GUIRef> session, LN calculates the estimated end unit costs as
				follows:</ListIntro>
               <ListItem>
                  <GUIRef href="/baanerp/ti/domains/sfc.mfre#at.creation" role="option">During Creating Order</GUIRef>:
				When the production order is planned.</ListItem>
               <ListItem>
                  <GUIRef href="/baanerp/ti/domains/sfc.mfre#at.release" role="option">During Releasing Order</GUIRef>:
				When the production order is released.</ListItem>
               <ListItem>
                  <GUIRef href="/baanerp/ti/domains/sfc.mfre#bef.first.wipt" role="option">Before First WIP Transaction</GUIRef>: Before the first <Link href="/baanerp/ti/glossary/glossary#000059" role="glossary">WIP transaction</Link> is carried
				out.</ListItem>
            </List>
         </ListItem>
         <ListItem>You use the <GUIRef href="/baanerp/ti/cst/ticst0210m000" role="session">Calculate Estimated End Item Unit Costs (ticst0210m000)</GUIRef> session.</ListItem>
         <ListItem>You use the <GUIRef href="/baanerp/ti/cst/ticst0411m000" role="session">Print Differences between Frozen and Current Estimated Costs (ticst0411m000)</GUIRef> session. If
		  you use this session, the costs are only printed, not stored.</ListItem>
      </List>
      <Paragraph>If you print the
		differences between the current estimates and the previous calculated values in
		the <GUIRef href="/baanerp/ti/cst/ticst0411m000" role="session">Print Differences between Frozen and Current Estimated Costs (ticst0411m000)</GUIRef> session, LN calculates
		the estimated unit costs.</Paragraph>
      <Paragraph>The operation costs and
		the material costs are determined when you create the production order. The
		operation costs and the material costs of the <Link href="/baanerp/ti/glossary/glossary#000110" role="glossary">end item</Link> are calculated when
		the costs are frozen. The data in the <GUIRef href="/baanerp/ti/cst/ticst0501m000" role="session">Estimated vs. Actual Material Costs (ticst0501m000)</GUIRef> and <GUIRef href="/baanerp/ti/cst/ticst0502m000" role="session">Estimated vs. Actual Hours Costs (ticst0502m000)</GUIRef> session are already filled at this
		moment. LN does the
		following when you calculate the estimated end-item unit costs:</Paragraph>
      <ProcedureSection>
         <Steps>
            <Step>
               <StepTitle>Determines the operation costs</StepTitle>
               <Paragraph>By means of the <GUIRef href="/baanerp/ti/cst/ticst0502m000" role="session">Estimated vs. Actual Hours Costs (ticst0502m000)</GUIRef> session, LN determines the
				operation costs per end-item unit by using the production times and the
				operation rates. LN calculates the operation rates based on the total costs of wages, machines, and
				overhead.</Paragraph>
               <Paragraph>LN stores the operation costs on
				the cost components. The operation costs are calculated per end-item unit end
				product. If results are calculated per work center (see the <GUIRef href="/baanerp/ti/cst/ticst0510m000#tisfc001.rswc" role="manual">Financial Transactions by Work Center</GUIRef> field in the <GUIRef href="/baanerp/ti/sfc/tisfc0100s000" role="session">Shop Floor Control Parameters (tisfc0100s000)</GUIRef> session), LN calculates the costs
				per work center. The costs are aggregated in the item-based view of the
				calculation office by using the aggregated cost components.</Paragraph>
            </Step>
            <Step>
               <StepTitle>Calculates the material costs</StepTitle>
               <Paragraph>LN determines the required
				materials stored in the <GUIRef href="/baanerp/ti/cst/ticst0501m000" role="session">Estimated vs. Actual Material Costs (ticst0501m000)</GUIRef> session. By means of the <Link href="/baanerp/ti/glossary/glossary#StandaCostPr_ti" role="glossary">standard cost price</Link>, LN calculates the
				material costs per component.</Paragraph>
               <Paragraph>The standard cost
				price includes the warehouse-related surcharges assigned to the item. If the
				material is linked to another warehouse, you must change the warehouse
				surcharge part to this warehouse.</Paragraph>
               <Paragraph>If the work center
				where the material is issued, is stored as a shop floor warehouse, the shop
				floor warehouse-related surcharges must be taken.</Paragraph>
               <Figure space-and-orientation="indented-estimated">
                  <HTML:IMG xmlns:HTML="http://www.w3.org/TR/REC-html40" height="223" width="648"
                            SRC="../images/tr_graph_tiom000188.gif"
                            alt="[...]"/>
               </Figure>
               <Paragraph>LN allocates the material to the
				shop floor warehouse during the release of the order. Even if the calculation
				is carried out when the order status is not yet released, LN determines the shop
				floor warehouse surcharge. If the material is of Direct Receipt in WIP type, no
				warehouse surcharge is determined.</Paragraph>
               <Paragraph>If the cost price
				is not calculated for a material, LN does not determine material costs.</Paragraph>
               <Paragraph>If you calculate
				the estimated end unit costs by means of the <GUIRef href="/baanerp/ti/cst/ticst0210m000" role="session">Calculate Estimated End Item Unit Costs (ticst0210m000)</GUIRef> session, you can select the <GUIRef href="/baanerp/ti/cst/ticst0210m000#check.mat.costpr" role="manual">Check Existence of Material Cost Prices</GUIRef> check box. If this check box is selected, LN checks whether all
				material cost prices are available so that LN can make a correct
				estimation.</Paragraph>
            </Step>
            <Step>
               <StepTitle>Calculates the end-item surcharges</StepTitle>
               <Paragraph>After all material
				and operation costs are calculated, LN calculates the surcharges. The surcharges
				are calculated in the sequence (item group, item and warehouse level) as
				defined in the <GUIRef href="/baanerp/ti/cpr" role="module">Cost Price Calculation</GUIRef> module.</Paragraph>
            </Step>
            <Step>
               <StepTitle>Calculates transfer prices</StepTitle>
               <Paragraph>The WIP transfers
				can only be calculated when, in the <GUIRef href="/baanerp/ti/sfc/tisfc0100s000" role="session">Shop Floor Control Parameters (tisfc0100s000)</GUIRef> session, the <GUIRef href="/baanerp/ti/sfc/tisfc0100s000#tisfc000.rswc" role="manual">Financial Transactions by Work Center</GUIRef> checkbox is selected and the <GUIRef href="/baanerp/ti/sfc/tisfc0100s000#tisfc000.trmt" role="manual">Transfer WIP method</GUIRef> is <GUIRef href="/baanerp/ti/domains/sfc.trmt#always" role="option">Always</GUIRef> or <GUIRef href="/baanerp/ti/domains/sfc.trmt#at.compl" role="option">Only upon Completion</GUIRef>. The calculated price is the incremental price up to the
				last operation of the delivering work center.</Paragraph>
            </Step>
         </Steps>
      </ProcedureSection>
      <ExampleSection>
         <SectionTitle>Example</SectionTitle>
         <TABLE border="1" borderstyle="default" space-and-orientation="indented-estimated">
            <CAPTION>Quantity Ordered = 100 pcs</CAPTION>
            <THEAD noTR="1">
               <TR no="1" isLast="true">
                  <TD rowspan="1" colspan="1"> </TD>
                  <TD colspan="2" rowspan="1">Work Center 1</TD>
               </TR>
            </THEAD>
            <TBODY noTR="9">
               <TR no="1" isLast="false">
                  <TD rowspan="1" colspan="1"> </TD>
                  <TD rowspan="1" colspan="1">operation 10</TD>
                  <TD rowspan="1" colspan="1">operation 20</TD>
               </TR>
               <TR no="2" isLast="false">
                  <TD rowspan="1" colspan="1">yield %</TD>
                  <TD rowspan="1" colspan="1">100</TD>
                  <TD rowspan="1" colspan="1">50</TD>
               </TR>
               <TR no="3" isLast="false">
                  <TD rowspan="1" colspan="1">qty plan in</TD>
                  <TD rowspan="1" colspan="1">200</TD>
                  <TD rowspan="1" colspan="1">200</TD>
               </TR>
               <TR no="4" isLast="false">
                  <TD rowspan="1" colspan="1">qty plan out</TD>
                  <TD rowspan="1" colspan="1">200</TD>
                  <TD rowspan="1" colspan="1">100</TD>
               </TR>
               <TR no="5" isLast="false">
                  <TD rowspan="1" colspan="1">net mat per 10 pcs</TD>
                  <TD rowspan="1" colspan="1">1 pcs</TD>
                  <TD rowspan="1" colspan="1">3 pcs</TD>
               </TR>
               <TR no="6" isLast="false">
                  <TD rowspan="1" colspan="1">estimated material qty</TD>
                  <TD rowspan="1" colspan="1">20 pcs</TD>
                  <TD rowspan="1" colspan="1">60 pcs</TD>
               </TR>
               <TR no="7" isLast="false">
                  <TD rowspan="1" colspan="1">cost per pcs</TD>
                  <TD rowspan="1" colspan="1">$ 5</TD>
                  <TD rowspan="1" colspan="1">$ 10</TD>
               </TR>
               <TR no="8" isLast="false">
                  <TD rowspan="1" colspan="1">total costs</TD>
                  <TD rowspan="1" colspan="1">$ 100</TD>
                  <TD rowspan="1" colspan="1">$ 600</TD>
               </TR>
               <TR no="9" isLast="true">
                  <TD rowspan="1" colspan="1">per pcs, per workc.</TD>
                  <TD rowspan="1" colspan="1">$ 100</TD>
                  <TD rowspan="1" colspan="1">$ 600</TD>
               </TR>
            </TBODY>
         </TABLE>
      </ExampleSection>
      <ExampleSection>
         <TABLE border="1" borderstyle="default" space-and-orientation="indented-estimated">
            <THEAD noTR="1">
               <TR no="1" isLast="true">
                  <TD rowspan="1" colspan="1"> </TD>
                  <TD rowspan="1" colspan="1">Work Center 2</TD>
               </TR>
            </THEAD>
            <TBODY noTR="9">
               <TR no="1" isLast="false">
                  <TD rowspan="1" colspan="1"> </TD>
                  <TD rowspan="1" colspan="1">operation 30</TD>
               </TR>
               <TR no="2" isLast="false">
                  <TD rowspan="1" colspan="1">yield %</TD>
                  <TD rowspan="1" colspan="1">100</TD>
               </TR>
               <TR no="3" isLast="false">
                  <TD rowspan="1" colspan="1">qty plan in</TD>
                  <TD rowspan="1" colspan="1">100</TD>
               </TR>
               <TR no="4" isLast="false">
                  <TD rowspan="1" colspan="1">qty plan out</TD>
                  <TD rowspan="1" colspan="1">100</TD>
               </TR>
               <TR no="5" isLast="false">
                  <TD rowspan="1" colspan="1">net mat per 10 pcs</TD>
                  <TD rowspan="1" colspan="1">2 pcs</TD>
               </TR>
               <TR no="6" isLast="false">
                  <TD rowspan="1" colspan="1">estimated material qty</TD>
                  <TD rowspan="1" colspan="1">20 pcs</TD>
               </TR>
               <TR no="7" isLast="false">
                  <TD rowspan="1" colspan="1">cost per pcs</TD>
                  <TD rowspan="1" colspan="1">$ 6</TD>
               </TR>
               <TR no="8" isLast="false">
                  <TD rowspan="1" colspan="1">total costs</TD>
                  <TD rowspan="1" colspan="1">$ 120</TD>
               </TR>
               <TR no="9" isLast="true">
                  <TD rowspan="1" colspan="1">per pcs, per workc.</TD>
                  <TD rowspan="1" colspan="1">$ 1.20</TD>
               </TR>
            </TBODY>
         </TABLE>
         <Paragraph>The transfer price from work center 1 to work center 2
		  =</Paragraph>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph>($100 + $600) / 7 = $100</Paragraph>
         </Formula>
         <Paragraph>The transfer price from work center 2 to calculation office
		  =</Paragraph>
         <Formula space-and-orientation="indented-estimated">
            <Paragraph> $7,- + $1.20= $8.20</Paragraph>
         </Formula>
         <Paragraph>The base for
		  calculation are all cost price components of material and operation costs. The
		  amounts are aggregated together and stored in a transfer price on the transfer
		  component <Link href="/baanerp/ti/sfc/tisfc0101s000#tisfc001.trcp" role="formfield">
               <GUIRef href="/baanerp/ti/sfc/tisfc0101s000#tisfc001.trcp" role="manual">WIP Transfer Cost Component</GUIRef>
            </Link> that is defined in the <GUIRef href="/baanerp/ti/sfc/tisfc0101s000" role="session">Production Orders (tisfc0101s000)</GUIRef> session.</Paragraph>
         <Paragraph>Refer to the Help of the <Link href="/baanerp/ti/cst/ticst3500m000" role="session">SFC Financial Transactions by Type (ticst3500m000)</Link> session and the <Link href="/baanerp/ti/pcs/tipcs3500m000" role="session">PCS Financial Transactions by Transaction Origin and Financial Trans. (tipcs3500m000)</Link> session for details about financial
		  transactions.</Paragraph>
      </ExampleSection>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000093" role="manual">Aggregated cost components</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000137" role="manual">Calculating operation costs (labor, machine, overhead)</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000000000000017" role="manual">Calculating operation costs (man and machine hours)</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000083" role="manual">Surcharges</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000065" role="manual">WIP transfer</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>