Modules > Cost Estimation

The Cost Estimation module generates an estimation of cost for each component. The cost rollup includes material cost for all items under an assembly and the corresponding manufacturing cost. To calculate the manufacturing cost, you MUST map a routing to the component being costed.

Some custom fields (e.g. Item total price, Item quantity, Operation labor hours, Direct cost per hour, Variable overhead, Fixed overhead, etc.) may need to be created and populated before running the cost estimation.

Please consult your Proplanner representative before using the Cost Estimation module, as customization will likely be required to accommodate company-specific costing requirements.

Item/BOM Fields:

Total Price: Supplier material costs plus any other ongoing charges (i.e. packaging) per unit of measure. Price by part number, revision, and using location.

QTY: Quantity of component per unit of measure of the parent

Apply Freight: Flag set by Engineer to indicate if freight would typically be paid for the part

Routing/Operation Fields

Direct Hours: Total direct labor hours required to complete an operation

Plant/Workstation Fields

Freight%: Annual percentage established by plant Finance to approximate inbound freight costs from suppliers (Plantwide field)

Direct Cost Per Hour: Plant hourly labor cost of production employees while on direct labor. Updated annually. (Workstation field)

Variable Overhead %: Percent of direct labor cost needed to cover variable overhead expenses. Updated annually. (Workstation field).

Fixed Overhead %: Percent of direct labor cost needed to cover fixed overhead expenses. Updated annually. (Workstation field)

Formulas

The fields above are used in the following formulas to calculate final output values.

•Total Manufactured Cost = Total Variable Cost + Fixed Overhead

•Total Variable Cost = Material + Freight + Direct Labor + Variable Overhead

•Material = ∑ (Total Price)*(QTY) for all MBOM components of the assembly and all subassemblies having stocking types designated

•Freight = ∑ (Total Price)*(QTY)*(Freight%) for all MBOM components of the assembly and all subassemblies having stocking types designated (and with Apply Freight flag set)

•Direct Labor = ∑ (Direct Hours)*(Direct Cost Per Hour) for each routing operation

•Variable Overhead = (Direct Labor)*(Variable Overhead %)

•Fixed Overhead = (Direct Labor)*(Fixed Overhead %)

To run a cost estimation, first click the Select button to search for the desired Item ID. Next, select a costing method, and click Calculate. Once the cost is calculated, you can generate a Cost Estimation Report by going to the Reports menu.