Mark/Judy/Others,
Please understand upfront that we have just loaded the Vantage software (v 8.08) and so I am just now getting our general ledger organized and functional. With that being said, my intentions were to run under a standard cost format allowing the actual cost variances to flow to our monthly bottom line as period costs. My goal was to have the actual costs flow through system in an average cost environment, and then use the average cost as a mechanism to do a cost roll at year end to reset the standards for all levles of stock. This is how I worked in a prior world.
My question becomes - can Vantage deliver the same type of relationships and run the same way that I have with othe packages, namely Symix & JD Edwards?
Thank you
Paul
Judy Havlik <judy.havlik@...> wrote:
Dear Mark...
Thanks so much for your response and for discussing this issue.
Wouldn't it be nice if we knew up front what quantities the customer
would always order so we could average ahead of time, but order
quantities here are as variable as the standard costs and there's no
way to predict it.
I don't know if it makes sense to do an analysis on the quantity
every time we receive an order and then go in and adjust the standard
costs every single time. That seems like a lot of maintenance with
300+ orders each month. I'm not sure why they chose to use standard
costs instead of average costs on finished goods. We use average
costs on purchased parts.
There is certainly plenty of guesswork in the Burden and Labor we
apply to our costs. But even with that being said the general
appearance on many of our parts is that we're losing money..and it
might not show this way if the standard costs matched the run size.
I would think that's a true statement.
Sincerely,
Judy Havlik
Please understand upfront that we have just loaded the Vantage software (v 8.08) and so I am just now getting our general ledger organized and functional. With that being said, my intentions were to run under a standard cost format allowing the actual cost variances to flow to our monthly bottom line as period costs. My goal was to have the actual costs flow through system in an average cost environment, and then use the average cost as a mechanism to do a cost roll at year end to reset the standards for all levles of stock. This is how I worked in a prior world.
My question becomes - can Vantage deliver the same type of relationships and run the same way that I have with othe packages, namely Symix & JD Edwards?
Thank you
Paul
Judy Havlik <judy.havlik@...> wrote:
Dear Mark...
Thanks so much for your response and for discussing this issue.
Wouldn't it be nice if we knew up front what quantities the customer
would always order so we could average ahead of time, but order
quantities here are as variable as the standard costs and there's no
way to predict it.
I don't know if it makes sense to do an analysis on the quantity
every time we receive an order and then go in and adjust the standard
costs every single time. That seems like a lot of maintenance with
300+ orders each month. I'm not sure why they chose to use standard
costs instead of average costs on finished goods. We use average
costs on purchased parts.
There is certainly plenty of guesswork in the Burden and Labor we
apply to our costs. But even with that being said the general
appearance on many of our parts is that we're losing money..and it
might not show this way if the standard costs matched the run size.
I would think that's a true statement.
Sincerely,
Judy Havlik
--- In vantage@yahoogroups.com, "Mark Wonsil" <mark_wonsil@...> wrote:
>
> Hi Judy,
>
> > We do our quotes in Vantage. Let's say the quote shows the
following
> > for a new part:
>
> Quotation is more advanced in Vantage than what I'm used to. The
ability to
> create a new assembly and ship right from an order is very cool.
>
> > When run at a quantity of 4,000 pieces, the costs are listed as:
> > Burden - .05002, Labor - .02281, Material - .13013
> >
> > When run at a quantity of 90,000 pieces, the costs are listed as:
> > Burden - .03526, Labor - .01585, Material - .13014
>
> Yes, this makes sense. Your labor and burden will be less because
the setup is
> amortized among more parts. There may be more costs due to the
consumption of
> perishable tooling as well, but that may be already accounted for
in the
> burden rate.
>
> > If our first order comes in for a quantity of 4,000 pieces the
part
> > is entered into Vantage using the costs listed above for the 4,000
> > piece price. Then, as the customer continues to order the
> > part...let's say all subsequent orders are for 90,000 or 200,000
> > pieces, Vantage will still calculate this part using the standard
> > costs we entered when we were running 4,000 pieces. That doesn't
> > seem like it would give us a very accurate Cost of Goods sold,
which
> > is why we thought average costs would make more sense.
>
> A couple of thoughts:
>
> 1) If 4000 is not a usual production run then it's probably not a
good number
> to use as a standard, right? The standard cost is quite arbitrary -
like a
> budget. You should make it reflect reality as best you can. If the
orders are
> equally in 90K or 200K lots, you may want to make your standards
based on 105K
> for example.
>
> 2) Why not recalculate the costs for each order by keeping all of
the costs in
> the quote and then shipping from the order. That quoting worksheet
is a nifty
> utility not found in many other packages. I hope that others will
correct me
> if I'm wrong, but it seems that doing it this way, each order can
have a
> different standard cost. If true, one could completely eliminate
the lot size
> variance issue.
>
> Like you Judy, I'd like to get a ruling on the field.
>
> Mark W.
>
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