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Former Member
Aug 01, 2012 at 01:40 AM

Labour Costs in Product Costing using no of employees field


Hi All,

I have got a requirement where the users wants to include labour costs into thier product costing. The way they want the system to calculate the labour costs is using total crew members.

I am aware that the routing contains the "No of employees - ANZMA" field and this can be used to input total members working on the production. Further, I made following configuration.

-> Created Activity Type "LABOUR" to update the labour activity per hour rate. Activity rates maintained for cost centre used in work centre

-> Created new Formula parameter (I am not using SAP_17 as my company has used this parameter for some different purpose) LABO.

-> Create new Formula CREW COST = (SAP_03 * LABO).

-> Assigned this formula to Work Centre for LABOUR activity.

I would want the system to work as (Total no. of employees from routing * Total Labour hours from routing * Per hour Labour activity rate)

i.e if total employees = 15, total labour hours in routing = 8 and activity rate/hr = 30, then total labour costs will be (15 * 8 * 30) = 3600

Now the issue is the athe SAP_03 parameter has Labour into it which uses dimension Time and standard unit as Hours. However I am not sure what dimension and unit of measure the field "no of employees" can use as it reflects total count that cannot be expressed in hours. Is this the reason that the system is not calculating the labour costs into standard cost estimate ?

Is there any other alternative to achieve it ?

I have already researched through other threads but did not find anything specific which can make this thing work.

Appreciate your responses.