Accounting for Overtime

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The Work Order module does not account for overtime automatically. Overtime practices vary a great deal from company to company. It is difficult to determine which job should be charged for overtime when multiple jobs have been processed during the same day. Often, overtime may be required due to problems at the shop that are unrelated to a specific work order.

Note To use the overhead rates to reflect overtime hours, do not allocate material cost to the same operation code as the overtime. The overhead percentage rates are applied to both labor and material costs.

To account for overtime, you must create additional operation codes with either higher standard rates or higher overhead rates and then enter those operation codes as labor transactions in Work Order Transaction Entry.

You can set up an operation code with the standard rate per hour that reflects the cost of overtime labor.

Expand/Collapse item  Example

If the standard cost rate is 10.00, as an alternate, you can set the variable overhead rate to 0.5 to account for the additional cost of overtime hours at time and a half.

 

For more information, see Operation Code Maintenance.