Activity Code Maintenance

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Select Production Management Setup menu > Activity Code Maintenance.

Overview

Activity codes define the various processes that are performed to manufacture a final product or parent item. Activity codes can be defined separately for each work center to identify the factory or shop location at which operations are performed.

Use activity codes to:

Establish multiple labor categories to record labor hours and cost from labor transactions created in Labor Entry and Work Ticket Transaction Entry.
Provide breakdowns of labor costing for general ledger postings.
Define reporting requirements for labor analysis.
Specify a default step description when an activity code is assigned to a newly created step.
Calculate step labor budget cost using the standard cost per hour assigned to an activity code.
Determine variable and fixed overhead amounts that are included in budget and actual labor cost amounts.
Specify a default earnings code to apply to labor transactions created in Labor Entry.

The default earnings code determines which employee pay rate is used to calculate actual labor costs if the Cost Labor at Standard check box in Work Ticket Class Maintenance is not selected.

Fields

Activity Code

Enter an activity code, or click the Lookup button to list all activity code and work center code combinations. Click the Activity Code List button to list all activity codes.

Work Center

Enter a work center, or click the Lookup button to list all work centers. The work center associated with the activity code is the default option, but it can be changed.

Description

Enter a description for the activity code.

This description will be the work ticket step description when an activity code is assigned to a step in Work Ticket Entry.

1. Main tab

Default Assign To

Enter the name or the person, department or group responsible for the activity.

Classification

Select an activity classification.

Standard Cost/Hour

Enter the standard cost per hour for the activity code. The standard cost per hour is used to calculate budget labor cost by multiplying step budget labor hours by the value assigned in the Standard Cost/Hour field.

The calculated fixed and variable overhead cost is then added to the budget labor cost to calculate total budget labor cost. This is referred to as activity-based costing.

If the Cost Labor at Standard check box in Work Ticket Class Maintenance is selected for the work ticket class assigned to a work ticket, the amount in the Standard Cost/Hour field is used to calculate actual labor cost, instead of the employee's pay rate, for labor transactions created in Labor Entry.

The Standard Cost/Hour is used to calculate the actual labor cost for labor transactions created in Work Ticket Transaction Entry regardless of whether the Cost Labor at Standard check box in Work Ticket Class Maintenance is selected.

TIP: Assign a standard cost-per-hour rate for each activity code to calculate budget labor costs for work ticket steps.

Department Worked In

Enter the default department number for the activity, or click the Lookup button to list all department numbers.

This department number is used:

As the default entry in the Department Worked In field in Labor Entry.
For labor transactions created in Work Ticket Transaction Entry and posted by the Work Ticket Transaction Journal/Update.

Where department numbers are maintained:

If Yes is selected in the (Integrate with) Payroll field in Production Management Options, department numbers are maintained in the Department Maintenance task in the Payroll module.
If No or Employees Only is selected in the Integrate with Payroll field in Production Management Options, department numbers are maintained in the Department Maintenance task in the Production Management module.

Default Earnings Code

Enter a default earnings code for the activity, or click the Lookup button to list all earnings codes.

If the Cost Labor at Standard check box is not selected in Work Ticket Class Maintenance, labor can be recorded on a work ticket at different employee pay rates by assigning an earnings code in Labor Entry.

If Yes is selected in the (Integrate with) Payroll field in Production Management Options, the earnings code assigned to the labor entry is used to calculate payroll transactions in Payroll Data Entry by the Periodic Labor Register/Update.

Where earnings codes are maintained:

If Yes is selected in the (Integrate with) Payroll field in Production Management Options, earnings codes are created and maintained in the Earnings Code Maintenance task in the Payroll module.
If No or Employees Only is selected in the (Integrate with) Payroll field in Production Management Options, earnings codes are created and maintained in the Earnings Code Maintenance task in the Production Management module.

Materials Scrap Account

Enter the materials scrap account to post scrap from Work Ticket Entry and Work Ticket Transaction Entry. Click the Lookup button to view a list of general ledger accounts.

Calculation Method

Select the calculation method to use for scheduling an activity.

Select Hours per Activity if it takes more than an hour to complete one activity.
Select Activities per Hour if more than one activity is completed per hour.
Select Fixed Time if an activity always takes a fixed amount of time to complete, regardless of the quantity being produced (for example, setup activities).

Ignore Queue Time

Select this check box to ignore any scheduled queue time assigned to the work center in Work Center Maintenance for this activity. Clear this check box to use the scheduled queue time assigned to the work center in Work Center Maintenance for this activity.

Queue time is used during the scheduling process. It is the amount of time that a task or step waits at a work center before the work actually begins. It is not used in the calculation of time required to complete an actual work ticket step. The setting for this field will be the default in Work Ticket Template Maintenance and Work Ticket Entry.

2. Overhead tab

Variable Overhead Type

Select a variable overhead type. Variable overhead can be defined for each activity code and is included in step budget and actual labor cost values.

Variable overhead parameters are used to calculate:

Variable overhead budget costs for budget labor hours if an activity code is assigned to a step in Work Ticket Entry.
Variable overhead actual cost for labor transactions created in Labor Entry.
Variable overhead actual cost for labor transactions created in Work Ticket Transaction Entry and updated by the Work Ticket Transaction Journal/Update.

Variable Overhead Percent

If Percent is selected in the Variable Overhead Type field, enter the percentage rate to apply to labor transactions and the labor portion of a step’s calculated budget cost.

If the Cost Labor at Standard check box in Work Ticket Class Maintenance is selected (activity based costing), variable overhead cost is calculated as a percentage of the activity code's standard cost rate/hour and rate/piece.

Variable overhead cost is also calculated as a percentage of the activity code's standard cost rate/hour and rate/piece for labor transactions created in Work Ticket Transaction Entry and updated by the Work Ticket Transaction Journal/Update.
If the Cost Labor at Standard check box in Work Ticket Class Maintenance is not selected, variable overhead cost is calculated as a percentage of the employee's hourly pay rate and the earnings code assigned to the labor transaction created in Labor Entry.

Variable Overhead Amount

If Amount is selected in the Variable Overhead Type field, enter the unit amount to apply to labor transactions and the labor portion of a step’s calculated budget cost.

Fixed Overhead Type

Select a fixed overhead type. Fixed overhead can be defined for each activity code and is included in step budget and actual labor cost amounts.

Fixed overhead parameters are used to calculate:

Fixed overhead budget cost for budget labor hours if an activity code is assigned to a step in Work Ticket Entry.
Fixed overhead actual cost for labor transactions created in Labor Entry.
Fixed overhead actual cost for labor transactions created in Work Ticket Transaction Entry and updated by the Work Ticket Transaction Journal/Update.

Fixed Overhead Percent

If Percent is selected in the Fixed Overhead Type field, enter the percentage rate to apply to labor transactions and the labor portion of a step’s calculated budget cost.

If the Cost Labor at Standard check box in Work Ticket Class Maintenance is selected (activity based costing), fixed overhead cost is calculated as a percentage of the activity code's standard cost per hour.

Fixed overhead cost is also calculated as a percentage of the activity code's standard cost per hour for labor transactions created in Work Ticket Transaction Entry and updated by the Work Ticket Transaction Journal/Update.
If the Cost Labor at Standard check box in Work Ticket Class Maintenance is not selected, fixed overhead cost is calculated as a percentage of the employee's hourly pay rate and the earnings code assigned to the labor transaction created in Labor Entry.

Fixed Overhead Amount

If Amount is selected in the Fixed Overhead Type field, enter the unit amount to apply to labor transactions and the labor portion of a step’s calculated budget cost.