xTuple for Service Businesses Demo Guide

To understand the impact of labor and overhead on the costing for manufactured items, let's use the example of YTRUCK1. To see the item costing for YTRUCK1, follow these steps:

Labor and overhead costing

YTRUCK1 is a standard-costed item. And so that is what we are seeing here in this screenshot: actual costs on the right, lined up next to standard costs on the left. In the far left-hand column, as you can see, are each of the costing elements that go into the costing for YTRUCK1. The reason the elements Direct Labor and Overhead appear twice each is that once they capture labor and overhead costs for lower level manufactured subcomponents (i.e., TSUB1) and the second time they relate directly to the top-level parent item.

As you can see, labor and overhead costs are combined with material costs and any other user-defined costing elements to make up the total cost for the manufactured item. The amount of labor and overhead cost assigned to each unit of YTRUCK1 is automatically calculated when costs are updated and posted, using the values defined on the routings and also the associated work centers.