How are Expected Costs calculated in Sage X3?

Hello!

We are finding that it's become near impossible for us to Close and Cost our work orders prior to our shipments. We run on average costs. To ensure our actuals are close to the expected, does anyone have a breakdown on how Expected Costs are calculated? I understand the BoM and Routings are used but how exactly does Sage build the cost? What formula is used where we could try and simulate the cost in excel to better understand and build our costs...

Any insight/help is appreciated! Thanks!! 

Jenny C. in NJ

  • Well Jenny, we're the same so I'll jump in the convo. The expected work order cost is from the provisional cost calculation. Provisional cost inquiry shows that. It's based on the components' standard cost and the operations' cost structures at the time the work order is released. It can be recaclulated within the work order or using the calculate expected cost function for a group of them. The actual work orders costs accumulate in WIP and replace the provisional cost in F/G during close/cost process. Yes, in a fast paced environment it's a real job to do. We recalc provisional on the work orders frequently(using the function in costing) to ensure they're up to date.

  • in reply to John Mitchell

    Hello John,

    We recalc provisional on the work orders frequently(using the function in costing) to ensure they're up to date. Can you tell me where what this is called the function is to update the provisional cost. When we build something for the first time we are seeing large variances especially if the qty on the work order is more than 1 ea and we have not closed the work orders below it. Wondering if this will help to update the provisional cost as we are building?

  • Thank you, all! What I'm looking for is a formula on how the expected is built...for example: Routings --> if I make 600 cases in 2 hours standard and I'm making 1200 cases today then the expected would be 4 hours * labor cost per hour - Right? and if I have a set up and run time, does the system total up those hours (IE: 2 hours to run but there is also a 1 hour set up time = 3 hours total time * labor cost per hour, i assume? ). Our OH uses a percentage and I've found it's tapping off of the labor, so I would take my percentage of 20% and multiply that against the labor total that I figured out above. These two totals then provide me with my expected labor/oh, right?  Also, if we run our material on average costs, how can I figure out my expected cost based on my current inventory averages? I don't see costs in the bom (aside from the report my engineer and I developed using a custom field that carries our average cost which is updated quarterly) so how can I figure out that part? I've googled for hours and can't seem to find just a basic formula on calculating this :( But maybe I missed it? I assume I'm on the right track but currently the set up time calculation is throwing a wrench into my math - i can't seem to tie out to the systems expected labor/oh when I have set up time involved.

    Hopefully this makes some sense? Thank you for any more insight that you can provide to me! :) 

    ~Jenny

  • in reply to SteveC

    Costing>Production costs>Calculate expected cost. The function is CALMFGCOST. Read the function help becasue there's a few ways to do that. You' want to do the standard cost update frequently for raw and components as well. Keeps the variance much tighter. Prices have been flucuating wildy over the last year or so we have to run those frequently.