Machine Hour Rate

[Former Member]

Hi,

Can we calculate machine hour rate in SAP. This is used for product costing.

Machne hour rate here icludes all cost like -

1) Land Cost - depreciation

2) Wages - all components of wages

3) sectional overheads

4) Power cost

5) maintenance cost

6) tools consumption cost

7) technical overheads

for calculating MHR should I define cost centers machine wise?

[ajaycwa1981]

Hi

You will have to create each machine as a cost center... You will end up having huge no of prod versions in PP and will be very difficult to manage with mix ratios for so many versions

One of our client did not listen at all to the concerns we raised and they are now paying heavily for it....

I would sincerely advise to squeeze the no of cost centers and have a single cost center for a group of machines which are more or less of same speed/output/purpose....

To track machine wise output, you can use Batch Characteristics in PP (if you are using Batch mnagement)... You can enter the machine name in the batch char while confirming production

Br, Ajay M

[Former Member]

Thanks for your reply.

Each of the cost component have different logic to be used while calculating MHR. Again I can not create separate cost center for machines. It will create confusion. I hace created cost centers departmentwise. Is there any other way to calculate machinewise MHR as machine is defined as Work center. suggest

[ajaycwa1981]

Hi Harsh

Sorry,there is no other way... Only cost centers can have activity prices....

My suggestion would be change your business requirement because having cost center per machine would be very cumbersome, which you are also agreeing to....

br, Ajay M

[Former Member]

hi..

If you want to calculate MHR for each machine you have to define seperate cost centre for each machine like Grinding M/c shop, Forging M/c shop etc.

Cost will be booked against each M/c shop to calculate MHR for each M/s.

kkumar

[ajaycwa1981]

Hi

Its possible...

In your Plan Version 0 (OKEQ) maintain a Cost Comp Structure which contains Cost Components / Cost elements for

) Land Cost - depreciation

2) Wages - all components of wages

3) sectional overheads

4) Power cost

5) maintenance cost

6) tools consumption cost

7) technical overheads

The price calculated in KSII or KSPI will have this break up... You can use this Cost COmp Str as Aux Cost Comp Str in Prd Costing

br, Ajay M

Br, Ajay M

[Former Member]

Hi,

Thanks for your reply. I need to calculate this MHR for each machine separately. we are defining each machine as work center. MHR will be my activity type. but HMR is calculated for Cost center and Activity type combination (tcode KSPI). how can I calculate this for each machine. Please suggest

[Former Member]

Hi,

please explain little bit about

Land Cost - depreciation

Regards,

satish

[Former Member]

Land Cost - The land area occupied by machine including the surrounding for electrical fittings/panels/cabinets, operator work place, plus one meter all around as moving space are measured in square meter per year. Land cost including building depreciation electrical installation, road/compound fencing expenditure, revenue tax, general electrical bills and water bills. These expenditures divided by total area occupied by the productive machines gives the land cost.