Closed Work
Order Costs Closed Work
Order CostsWhen a work order is closed, we can measure the efficiency of production at the shop floor level.
All the variance analyses are based on the finished, or closed, work orders that have therefore been entered into the warehouse.
The fixed cost variances (in the budget lines) are not taken into account as they are only used for budget control.
By clicking on the button Costs, from the Closed work orders window, or in the Control menu, one accesses the window displaying the costs and variances. This window performs a variance analysis between the budgeted costs and the actual cost.
This window has five tabs:
•Materials: for each operation, the following data are displayed:
o Standard: the standard required materials quantities,
o Actual: the actual required materials quantities,
o Variance: the difference between the standard required ,materials and the actual quantities,
o Std cost: the standard cost for the item,
o Var. Value: the standard value for the variance.
•Operations: for each operation, the following data are displayed,
o Std hours: the required times,
o Used hours: the actual times,
o Variance: the difference between required and actual times,
o Std cost: the standard cost per hour,
o Var. Value: the standard value for the variance,
•Set Up Labor: for each operation, the following data are displayed,
o Std hours: the required setup times,
o Used hours: the actual times,
o Variance: the difference between required and actual times,
o Std cost: the standard cost per hour,
o Var. Value: the standard value for the variance
•Direct Labor: for each operation, the following data are displayed,
o Std hours: the required direct labor times,
o Used hours: the actual times,
o Variance: the difference between required and actual times,
o Std cost: the standard cost for one hour,
o Var. Value: the standard value for the variance
•Execution variances: this panel displays the execution variance by type of cost. In other words, it shows the difference in value between what was forecasted in the work order operations and in the bill of materials of the produced item on the release date:
o the actual usage of parts,
o the actual machine and labor times.
•Budget variances: this panel summarizes the variances relating to the budgeted costs and the actual costs. It shows the difference between the real costs and the standard cost of the item.