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Production Templates Consist of:

Items Used

Items used will be deducted from inventory, the value of items used will be included in the total cost of the work order.

Costs

Additional costs (such as labor or untracked packaging) can be added from the cost file.  The value of these costs will be included in the total cost of the work order.

Items Made

Items made will be added to inventory, the total value of all items made will be equal to the total value of items used and costs added.

 

Cost Calculation Method:

Weighted Average Cost

Determine total cost of work order:
Value of all items used + Value of all additional costs = Total Work Order Cost.

 

Determine the cost burden of each item made:

If a single item is being made it will receive 100% of the cost burden.

 

If multiple items are being made:

Determine value of each item produced based on current item file cost.

Determine value of all items produced based on current item file cost.

Divide each item produced value by total item value produced value this is the percentage cost burden.

 

Determine the new cost for each item made:

Multiply percentage cost burden by total work order cost.
Divide by quantity of item produced.