Standard Labor Costs Formula

 

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Step 0000 is always required because this record (from the WO3 Work Order Operation Detail file) holds the standard and actual material costs, as well as the labor and overhead costs associated with a step 0000 operation. Standard costs are established with the acceptance of a firm-planned work order. Actual costs are established with the material issue and labor transaction entries after the work order release.

The following formula can be used to calculate the standard labor cost.

Std Labor Cost = (Hourly Labor Rate x Planned Hours) +
(Planned Piece Qty x Piece Rate/Planned Cost Divisor)

Expand/Collapse item  Standard Labor Cost Example

Work Center

Op. Code/ Step Code

Hrly Rate x

Pln Hrs

Pce Qty x

Pce Rte/

Pln Cst Divsr =

Cmpt Lab. Cst

SHER

0001/0000

9.00

4.167

50

20

5

237.50

FAB

0001/0010

15.00

33.333

100

30

20

650.00

ASSMB1

0001/0020

9.00

3.333

400

5

1

2030.00

ASSMB2

0002/0030

7.50

6.000

200

0

1

45.00

ASSMB3

0003/0040

0.00

20.000

100

20

10

200.00

Total Direct Labor Costs

 

 

 

 

 

3162.50

 

The following formulas can be used to calculate the fixed and variable overhead for labor.

Fixed Overhead for Labor = (Hourly Fxd Overhead Rate x Std Hrs for Step) +
(Computed Labor Cost for Step x Fixed Overhead% of Cost)

Var. Overhead for Labor = (Hourly Var Overhead Rate x Std Hrs for Step) +
(Computed Labor Cost for Step x Var. Overhead% of Cost)

 

Expand/Collapse item  Overhead Calculations Example

The following overhead calculations are for noncrew labor transactions.

Work Center

 

Op. Code/ Step Code

Hrly Rte x

Pln Hrs

Comptd Lab Cst

% of Cost

Comptd Ovrhd Amt

SHER

FXD

0001/0000

8.00

4.167

237.00

6.00

47.59

 

VAR

 

4.00

4.176

237.50

3.00

23.79

FAB

FXD

0001/0010

4.00

33.333

650.00

0.00

133.33

 

VAR

 

6.00

33.333

650.00

0.00

200.00

ASSMB1

FXD

0001/0020

15.00

3.333

2030.00

7.50

202.25

 

VAR

 

0.00

3.33

2030.00

0.00

0.00

ASSMB2

FXD

0002/0030

0.00

6.000

45.00

6.50

2.93

 

VAR

 

0.00

6.00

45.00

10.00

4.50

ASSMB3

FXD

0003/0040

0.00

20.00

200.00

0.00

0.00

 

VAR

 

5.50

20.00

200.00

6.50

123.00

Total Labor Overhead FXD

 

 

 

 

386.10
=====

 

VAR

 

 

 

 

 

351.29
=====

 

Hourly and piece rates are defined in Operation Code Maintenance.

For more information, see:

Standard Costs Formulas

Operation Code Maintenance