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Amortizations in the production order

We are in a 4.6C discrete manufacturing environment. Our business unit has purchased an expensive piece of equipment and would like to receive amortization (credit) in the production order. This credit would be for each unit that has been produced from this piece of equipment. I have tried using an additional activity in the routing, but this will require an activity for each piece of equipment (approx. 18).

We are in a 4.6C discrete manufacturing environment. Our business unit has purchased an expensive piece of equipment...

and would like to receive amortization (credit) in the production order. This credit would be for each unit that has been produced from this piece of equipment. I have tried using an additional activity in the routing, but this will require an activity for each piece of equipment (approx. 18). Is there a way to receive credit for the equipment? Can this be accomplished in the BOM? Can this be accomplished in the Routing?


Your idea of creating an additional activity should be the best way to achieve this, although I'm unsure why this would need 18 different ones. The activity costs within the cost centre would be the way to control the different costs per work centre all based on the one new activity. What you could also do is create a formula that uses the machine or labor time to calculate it's cost, so that you do not need to maintain an additional entry in each routing. If you need clarification on any of these points then please email me paul.krant@diagonal-consulting.com.


This was last published in December 2002

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