Our parts have a standard cost in Part Tracker that varies from the standard cost in the Bill of Material for the same part. Could you please advise why this might be occurring? Also, could you please advise what we can do to avoid this from happening? Is there perhaps an option we need to check or select to ensure the numbers always match.
The Bill of Material Cost report calculates what the standard cost for that part should be based on current method and material costs. The Standard Cost in Part Tracker and that is used in Part Transaction History, Inventory/WIP Reconciliation, WIP calculations, etc. are set using either a Cost Adjustment or a Cost Roll-Up. Your company needs to set up a process where someone runs a Costing Workbench group and follows the Cost Roll-Up process to periodically update Standards based on updated methods. Our company performs a roll-up for every new part before it is used and also about every 6 months or when material prices fluctuate. Our primary component is steel, so in 2020 and 2021 we were running a roll-up almost every month when tariffs and supply chains were messed up.
There is no automatic way to update the standard cost without running a Costing Workbench (Cost Roll-Up) group. By definition, Standard Cost is a cost you set that does not change except through a controlled process. If you want Epicor to reflect the costs you’re incurring to make those parts in real-time, you will need to change your parts to use Average cost (or lot average if you have lot tracking).
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I understand the standard cost that appears in Part Tracker is the actual standard cost for the part but what does the cost that appears in the Bill of Material represent? Does it represent the estimated standard cost based on the current year’s labor and burden rate?
Yes. Any updates to labor and burden rates, production standards, production lot sizes, etc. will cause the BOM Cost report to show a different cost. The BOM Cost report estimates the Standard Cost using the current values you have in Epicor for labor rates, burden rates, production standards, etc.