Solution:

This article explains how to track labor costs.

In order to track labor costs, at least one labor grade must be created as a service item in Sage Pro ERP Inventory Control. A service item is a non-stock inventory item where the system does not track on-hand quantities. Costs can be easily maintained for the labor rate from the Cost/Usage tab on the Item at Location screen.

Labor items can be assigned directly to BOMs or used with routes in Shop Control. It is important to assign the correct General Ledger account in the Item Control field for the service item. This account will be credited when labor is consumed during the work order completion process.

The work order selects the inventory items from the BOM; and the service items from the BOM or route files during work order explosion. The service item holds the cost per hour for the operation step. When the work order is completed, the system will issue a credit to the Item Control account for each component and/or labor item of the parent part and one debit to the Item Control account for the parent part. Prior to completing the work order, the service items can be updated on the work order to reflect the actual hours used.

Work centers and operations must be defined in order to use a route. If the work centers are operations, it is suggested to create one generic work center code (like OUR_PLANT) or create identically named work centers that match the operation steps. The system uses operations to drive costs. Work centers are used for defining the global capacity. By combining the operations and work centers in a route, the system knows the steps that are followed to make a finished good. This routing information is critical for use in the Shop Control module where fixed capacity scheduling is calculated.

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