Katana allows for precise entry of production operation costs, calculated by multiplying the cost per hour of a resource by the time taken to perform an operation. This guide outlines how to define these costs for different production steps, incorporating factors like labor, maintenance, and electricity costs.
The total cost of production operations is calculated as the sum of the cost of the operation steps.
The cost of an operation step is calculated based on the average hourly cost and the duration of performing the operation step.
Cost and Cost per hour
Cost = Cost per Hour x Time
Cost per hour - The average hourly cost of performing a production operation step. Each step can use a different Cost per Hour. The cost typically includes salary (labor cost), and could also include the average hourly maintenance and electricity usage of a workstation. It should not include material costs.
When first entering the Cost per hour for a resource, the entered value will automatically be saved as the default Cost per Hour for that Resource. You can assign and edit the default Cost per Hour for Resources in Settings > Resources. The default Cost per Hour will automatically be populated for your Resource when you add any Production operation steps.
Time - The duration of an operation step to produce one unit of a product. This can be edited on the manufacturing order if the actual time spent in production is different from the default value defined in the Production operations tab of a product.
The Cost cannot be manually inserted and can only be calculated based on the formula above.
Note: If you'd rather add production operation costs to the total manufacturing cost of a product as a single number, instead of creating step-by-step Production operations, you can create a single step under production operations, add the desired cost to the Cost per hour field, and 1 hour to the Time field.
Using different operation types
If you're using different types of operations (only available through the Advanced Manufacturing add-on), the planned time and operations cost will use different calculations.
Operations planned time calculation:
Process (
planned time = time per unit × product quantity)Setup (
planned time = time per unit)Per unit (
planned time = time per unit × product quantity)Fixed Cost (
planned time = time per unit)
Operations cost calculation:
Process (
cost = time × cost per hour × product quantity)Setup (
cost = time × cost per hour)Per Unit (
cost = product quantity × operation unit cost)Fixed Cost (
fixed cost irrelevant of quantity or time)
Your feedback is always appreciated. Let us know your thoughts on this article or anything else in Katana that you'd like to see improved: [email protected]