When using the Costing Workbench to roll standard costs, we have found an issue that will generate significant variances in the burden cost element. The issue appears if you use crew sizes other than 1. If a workstation were to have multiple workers who logged into the operation at the same time, you would likely end up with little variance in actual labor whereas you would have an automatic large variance for burden.
Steps to Recreate:
When using the Costing Workbench to roll standard costs, we have found an issue that will generate significant variances in the burden cost element. The issue appears if you use crew sizes other than 1. If a workstation were to have multiple workers who logged into the operation at the same time, you would likely end up with little variance in actual labor whereas you would have an automatic large variance for burden.
Steps to re-create:
Production Management > Engineering > Setup > Resource Group
a. Define a resource group with Costing Labor Rate of $22 & Costing Burden rate of $11 (flat). Resources use Group Values.
i. Burden = Labor
2 Production Management > Engineering > General Operations > Engineering Workbench
a. Create a MoM with one operation & one resource group.
i. Set Crew Size to 30
b. Set the Prod Std to 1 hr/piece
Production Management > Engineering > General Operations > Costing Workbench
a. In costing workbench,
i. load cost details
iii. When you open Actions > View Costs, the problem appears. The standard burden total cost is only 1 hr x the burden rate when in fact, the actual labor entries will apply an hr of burden for each hr of employees logged into the job. In our case, we have predicted in the MoM that 30 people will log into the operation. If they log in for an hour each, as the production standard predicts, at $22/hr actual employee rate, their actual labor applied will be in line with the standard labor cost, however the burden will be 30 x 1 hr employees x $11/hr burden rate (total actual = $330), which is off from the standard burden cost by 29 times.
The enhancement we are recommending is to have burden recognize crew size and the burden application method (split labor/burden=labor) in its standard cost roll calculation in costing workbench.
I would like to call for anyone who has been having issue(s) and has been promised an Enhancement for years in regards to this. To put in a call into Epicor requesting this feature. The more calls, the more likely it is to be implemented.
Enhancement Details:
SCR 176255 Created as SUGGESTED ENHANCEMENT:
Crew Size only affects Labor cost calculations. An option should be added for it to also affect Burden cost calculations.
SUGGESTION:
Currently, crew size only affects estimated labor hours/labor costs on the quote, job and rollups
For companies that are labor based, i.e. a service industry, there should be an option to have crew size also affect the estimated burden costs on quotes, jobs and cost rollups…
This could be a setting in Company Config if checked, crew size would be used as a factor in estimated labor AND burden costs.
PURPOSE:
To get accurate actual burden costs by Direct Labor Hours is needed to avoid large variances they receive with Standard costed parts. They can have 1 assembly line with 40 employees and need the burden calculation the same as labor.
Has anyone found a way to deal with this issue since Epicor has not come out with an enhancement to deal with. I’m on 10.2.300 and the issue still exists.
We are on 10.2.600.7 and when we look at costs the crew size is not factoring in against the unit cost at all for standard labor even on a roll up, definitely not on the cost screen. This is from my ticket today:
My original submission: Hello support,
So in Pilot we are looking at costing for roll up. We have 2 resources on the job. We set it up for this test with simple math, saying we only make 1 unit per hour per 1 parent. Both resources were set to a burden rate of $100, with a labor rate of 24.50 and a crew size of 3. When we look in Engineering Workbench>Actions>Revision>View Cost we see that the burden is properly calculated at $200 ($100 per machine) but the labor is only $49 (2 operators x 24.50) when the labor should be $147 ((3 crew x 2 machines) x24.50).
This would be problematic during a rollup as the labor will be understated. We are also concerned because in our reading it sounds like when a job would be created the crew size would in fact be considered and the expected job costs would be $147 even thought the bill from roll up would only be $49.
Why is the costing not taking into account the crew size? See below for print screens
EpicCare response - attached 2 KB’s and asked if we have worked with a consultant-read the KB’s
My response: Yes we have and they seemed to think the crew size should be multiplying the labor, but reading the 2 KB’s seem to indicate that it does not for cost roll up but does for estimating-which we do not use. The one KB says there is the possibility of an enhancement. So unless I am misunderstanding, you are confirming that the crew size will not multiply the labor in our roll up by 3?
EpicCare response: Correct. Attached article goes over our improved process of enhancement requests.
This seems like pretty standard stuff from my 20 years in mfg and I cannot believe it has not been addressed yet in Epicor. I am going to reference your enhancement request in mine. Anybody else willing to get on board with a request or if you have a workaround please respond.
