We have jobs where we take bare material and do some condition (hot air flow) to it and it produces our raw material for our products.
One job I am looking into was set to produce 35700 litres. The estimated part cost was just over 6 cents. totaling a cost of 2238$ as the TLE material cost
The employee just reported 806 litres produced.
When I look into the Job costs in Job tracker, I was stunned to see that the TLA values for material was
2415$.
Heck… I was missing 97% of what was estimated!!! I was expecting something like under 60$
My question is: How the TLA material costs is generated ? ( Can I manually find this value? ) How is this cost almost the same as my estimated when only 3 % of the product was used?
It’s based on the material transactions for the job, you could calculate it by summing all those values. If you go to the Material Transactions tab in the job tracker, you can see the extended cost for each transaction.
I believe the actual is a straight division of the material and labor to date divided by the quantity completed. So as you complete more, the cost will continue dropping as you have issued enough material for 35700 liters but only produced 806.
I’m not sure if this is still an issue, just something I remember seeing once where the materials were supplied from other jobs.
Some kind of timing thing related to processing order in the shop.
Depending on when the part was issued to the parent job - it didn’t always include all the costs expected.
Also, have you already found the “Job Costing Tech Ref Guide” in the help system?
I usually start with this guide whenever I have questions like yours.
That is why I calculated the actual to be around around 3.06$
But I went to look as suggested by Adam, and found 1 line in the Material transaction tab indicating the Material unit cost being 2.42$
So I would assume a 2.42 * 806 = 1950$
The reason I am questionning the costs is that I have developped a DD where upon close of the job, I send an email if the Actual cost is 10% over or under as the estimated cost.
Actual costs = summation of all the TLA and LLA costs.
Estimated costs = summation of all the TLE and LLE costs.
In my example my Estimated was 2293.76 and the actual was 2465.69. giving a variance of 7.5%
Under the 10% so no email was sent…
BUT
The quantity to be produced was not matched 35700 vs 806. I should have flagged this job to be reviewed as of why the expected production was not met. (Now I do … )
I sincerely would have expected a much higher difference in the costs though…
In Epicor, I do not see the cost difference of this production mismatch…
I think you would need to get much more detailed about what was actually done as it sounds like the job you are referencing was closed short. Did material get received back to stock? Is the estimated what it was at the beginning of the job or at the end when it was closed short?
Of course it was closed short! (I do not know the reason…probably a missing number in the quantity…) (The reason my DD should have been issued the email warning…)
The raw material is in inventory under a lot number . The job transforms this material into a new material (another PartID ) and places it into Silos, ready to be consumed by other production jobs.
Upon the completion of the job the material used is indicated as STK-MTL of a quantity of 999kg.
The new material is indicated as MFG-STK of a quantity of 806lit placed into the Silo.
