We have noticed some anomalies in how burden is being applied to job material. In some cases the job material is entered with a cost which appears to take the part burden rate and store the calculated unit cost in the estimated material burden cost at the time the material sequence is created. Other times the part has no unit cost on the job so the estimated material burden cost is 0.
The issue comes in when we change the material burden rate on the job via BPM. We are not currently changing that burden cost to match the new rate. It seems like Epicor is picking that unit cost up instead of calculating it as the transactions hit the PartTran table. But if the cost is 0 it will calculate it using the burden rate on the material. Is that true? If that is the case and the part is actually purchased with a different cost than is what is on the job, what burden is captured in the PartTran?
It is a bit confusing. Here’s some verbiage from the Job Costing Technical Reference Guide (I’d recommend downloading and reviewing from EpicWeb, maybe you can make some sense out of it, haha):
You can enter a Material Burden percentage rate on a part record. This value is then the default used on all quote and job estimates, although you can override this value on a specific method of manufacturing. This value is also used as the default material burden percentage for any estimated salvaged part quantities received on part methods. The actual material burden value used for the final job cost, however, is always the specific rate defined on the part record.
So, one sentence SEEMS to say the MtlBur on the Part is default and you can override it on a specific method… but the other way to read that is, that the Burden rate on the job is used for quoting and estimates ONLY. It pulls in the burden from the part and you can override it. But that overriding value is still ONLY used for quoting and estimates?? That’s a touch unclear.
The last sentence says final job cost ALWAYS uses the specific rate defined on the part record.
I’m not sure what your BPM is doing. If it is changing values on the job material burden rate(s)… that may not impact final job cost at all.
Can you provide any context, screen shots, etc.? We use a static material burden, so our values are always the same, so I’ve never explored this.
Thanks for the feedback. I will download that guide and dig through it.
Here is the context. Each year our burden rate changes. I have a BPM that goes through each part in the database and each material on open manufacturing jobs to set the burden rate to the new one. Our CFO runs some queries to build spreadsheets for reviewing the total transactions by project for the previous month. The spreadsheet calculates the burden rate, which shoud tie to the current rate. However, they don’t always and I have been trying to determine why. I have seen some of the material burden on the PartTrans showing the burden based on the burden cost field in the job material which apparently is calculated when the material is put on the job and not updated when the burden changes.
I have not been able to determine 100% if this is where are deltas are coming from. I am not sure 100% where to look besides the PartTran.
One other thing I noticed is we had some material go into the Inspection queue and those transactions in the PartTran do have the old rate. I guess those go through a different process since the burden rate is the old one? The PO and the job were created before we changed the rate.
Typically, you can think of the material burden rate as something that is applied upon RECEIPT of the part into stock. This all of course depends on your costing method… in Standard cost, this is used to calculate the total standard, but in aversage cost, it is only applied upon receipt (of both JOBS and POs.
Assuming AVERAGE costing for a moment.
you receive a PURCHASED PART that has a 10% Mtl Burden, and the PO is for $2 each, then the cost of the part will be $2.20 each once received, even though the PO was only $2.
you receive a MANUFACTURED part with a 10% mtl burden, same applies only it looks at the total cost to manufacture the part, and then applies that 10% material burden on top.
Thanks. I understand that but I am trying to figure out what transactions to look at to determine what rate really got applied to them.
My example above shows that the transactions got moved from the inspection queue to the job after the new rate was put in so I assume that they were technically received before the rate change so that makes sense.
What I am really trying to find is the transactions that don’t have the right burden on them and how they got the wrong rate. Looking at most of the transactions they do have the right rate but I know some don’t because the calculations our CFO does shows the overall rate for a project is wrong. Are there transactions in other tables besides LaborDtl and PartTran?
