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Example of How Microsoft Dynamics AX Calculates

Indirect Costs Using a Costing Sheet in Bill of

Materials and Production in Microsoft Dynamics AX 2009 - North

America

Last Modified 1/31/2011

Posted 3/4/2010

This is an example of how Microsoft Dynamics AX Calculates Indirect Costs Using a Costing Sheet in Microsoft Dynamics AX 2009

This document includes steps users can use to help understand how the Costing Sheet works.

1. Log into the Contoso Database or demo data for Microsoft Dynamics AX 2009.

2. Create a new Indirect Cost group called Lab_OH with a Name of Labor Overhead.

Go to Inventory Management, choose Setup, choose Bills of materials, choose Cost groups.

Create a new cost group called Lab_OH

Enter Labor Overhead in the Name field

Choose Indirect in the Cost group type field

Save the new Cost group

3. Go to the Costing Sheet

Go to Inventory Management, choose Bills of Materials, choose Costing sheet setup

4. Create a new Total Node Called Overheads

Go to Inventory management, choose setup, choose Costing sheet setup

Right-click the COGM node and then click Create

Select Total in the Node Type field and click OK

With the new Total node selected, on the Edit tab, mark the Header and Total checkboxes in the Setup field group

5. Create a new Cost group node

Right click the Total Node you just created and choose CreateChoose Cost Group in the Select node type field.

Call the new Cost Group Labor Overhead

Assign the Labor Overhead Cost group you created in step 2 to this node

On the Edit tab in the Setup field group, choose the Lab_OH Cost group

6. Create a Surcharge Node

Under the Costing group Node created in step 5, create a new Surcharge Node

Right-click on Labor Overhead and choose Create

Choose Surcharge in the Select node type field

On the General tab, choose Total in the Subtype field

On the Calculation Tab choose Manufacturing in the Code field

Under the Surcharge section at the bottom of the form, choose a Version in the Version field, choose a Site in the Sitefield and enter 50.00 in the Percent field

Save the Surcharge

Click on the Activate button to Activate the Surcharge

Under Posting Configure the WIP and costing accounts

Save the Costing sheet by choosing the Save button

7. Create a new production order for the Item 1171

Create an order for 1 unit

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Estimate the order

Go to Inquiries, choose Price Calculation, then select Costing Sheet

Please note when you go to Overhead, then choose Labor overhead that the value is 50% of the Manufacturing cost, in this casefor a production for 1 unit, this cost is going to be 3.33

8. Delete the Surcharge node and create a Rate node instead.

Highlight the Surcharge node and choose the delete icon.

Right-click on the Labor Overhead node and choose Create

Choose Rate in the Select node type field

Choose OK

On the General tab, choose Process in the Subtype field

On the Calculation tab, choose Manufacturing in the Code field

On the Posting tab, choose the WIP and Indirect posting accounts

In the Rate section at the bottom of the form

Choose a version in the Version field

Choose a Site in the Site field

Enter 50.00 in the Amount field

Save the node

Choose the Activate buttonSave the Costing Sheet

9. Create a new production order for the Item 1171

Estimate the production order

Go to Go to Inquiries, then choose Price Calculation

Please note that the calculated overhead is $50*Process time for each operation with a cost category related to theManufacturing Node. In this case it calculates out to be 19.64

0. Change the subtype of the Rate node to Quantity for 1 unit

On the General tab, choose Quantity in the Subtype field

Save the Costing Sheet

1. Create a new production order for the Item 1171

Estimate the production order for the Item 1171

Go to Inquiries, then choose Price Calculation

Note that the calculated Labor Overhead is $50*Quantity produced in each operation. In this case is going to be 100