Work Order Manual - Parkinson Accounting Systems

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Parkinson Accounting Systems Work Order Setup

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MAS 90 & MAS 200 TRAINING CLASS

Work Order

1. SETTING UP WORK ORDER

On the Work Order Setup menu, click Work Order Options. Each module can becustomized to fit your company's specific accounting requirements. Work Order Optionspresents a series of options allowing you to select features most appropriate to yourbusiness.

Print Work Order Travelers Upon Release

Select the Print Work Order Travelers Upon Release check box to print travelersautomatically when work orders are released using Work Order Transaction Entry. Clear

the check box to manually select work orders for which travelers are printed using WorkOrder Traveler Printing. A traveler tracks material to be issued and steps to be performedon a work order.

Print Material Listing on Work Order Traveler


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Select the Print Material Listing on Work Order Traveler check box to include materialinformation on the traveler in addition to the step information. Clear the check box toexclude material information from the traveler.

Material Print Format

Select Material First to print material first followed by operational steps on the traveler.Select Material Mixed to print material mixed with the operations to which they areissued. This option is available only if the Print Material Listing on Work Order Travelercheck box is selected.

Automatically Increment Steps By

Type a multiple of 10 (from 10 to 100) to be used as the increment when entering workorder step numbers automatically in Routing Maintenance or Work Order Entry.

Retain Work Order Transaction Detail

Select the Retain Work Order Transaction Detail check box to retain transaction detail forwork orders in the Cost Ledger file. Because each work order can accumulate manytransactions, this can require a large amount of disk storage space. Clear the check box ifyou do not want to retain transaction detail for work orders; the On Demand Cost Ledgercannot be printed.

Print WOs on Back Order Fill Report

Select the Print WOs on Back Order Fill Report check box to include work order

component requirement information on the Back Order Fill Report. Clear the check boxto exclude work order component requirement information from the report. NOTE Your response at this option determines whether work order componentrequirement information prints on the Back Order Fill Report in this module and in theSales Order, Inventory Management, and Purchase Order modules.

Future Days to Print Work Orders

Type the number of days in the future that work order component requirements will printon the Back Order Fill Report. This option is available only if the Print WOs on BackOrder Fill Report check box is selected.

Print Picking Sheets

Select Sort by Warehouse to print picking sheets sorted by both warehouse and workorder number. Select Sort by Work Order to sort by work order number only. SelectNone if you do not want to print picking sheets. The Sort by Warehouse option isavailable only if the Require Multiple Warehouses check box is selected in the InventoryManagement Options window.


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Page Break by Step Number

Select the Page Break by Step Number check box to print each step number of thepicking sheet on a separate page. Clear the check box to print multiple steps per page.This field is available only if Sort by Warehouse or Sort by Work Order is selected at the

Print Picking Sheets field.

Sort Items by Bin Location

Select the Sort Items by Bin Location check box to sort items by bin location on pickingsheets. Picking sheets sort by step number first, and then by bin location. Clear the checkbox to sort items by item number. This field is available only if Sort by Warehouse orSort by Work Order is selected at the Print Picking Sheets field.

Print Picking Sheets Upon Work Order Release

Select the Print Picking Sheets Upon Work Order Release check box to select pickingsheets for printing automatically when work orders are released during Work OrderTransaction Entry. Clear the check box to manually select work orders for which pickingsheets will print during Picking Sheet Printing. This field is available only if Sort byWarehouse or Sort by Work Order is selected at the Print Picking Sheets field.

Allow Memo Inquiry from Data Entry

Select Yes if memos will be accessed in Work Order Transaction Entry for reviewpurposes only. Select No to deny any memo access. Select Maintenance to allow thereview, maintenance, and creation of memos. Memos can contain information pertinent

to a specific work order.

Addition of Work Centers and Op Codes

Select Routing Maint to allow the addition of new work centers and operation codesusing Routing Maintenance. Select W/O Entry to allow additions using Work OrderEntry. Select Both to allow additions using both tasks. Select None if additions are notallowed.

Work Order Issue Method

Select an issue method to determine how material, labor, and outside processingtransactions are created. The issue method selected at this field determines the defaultsetting at the Issue Method field on the Work Order Entry Header tab. Automatic: Material, labor, and outside processing transactions are automaticallygenerated when the work order is released if Yes or Available Quantity Only is selectedat the Auto Issue Material Transactions field, and the Auto Generate Labor Transactionsand Auto Generate Outside Processing check boxes are selected on the Work OrderOptions Main tab.


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Backflush: Material, labor, and outside processing transactions are automaticallygenerated when a completion transaction is entered if Yes or Available Quantity Only isselected at the Auto Issue Material Transactions field, and the Auto Generate LaborTransactions and Auto Generate Outside Processing check boxes are selected on theWork Order Options Main tab.

Manual: Material, labor, and outside processing transactions are enteredmanually during Work Order Transaction Entry.

Auto Issue Material Transactions

Select Yes to generate material issue transactions for components when work ordersusing the Automatic issue method are released, or when completion transactions areentered for work orders using the Backflush method. Select No if you do not want togenerate material issue transactions automatically. Select Available Quantity Only togenerate material issue transactions for components up to the available quantity of eachcomponent item when the Automatic issue method is used for the work order.

Auto Issue Material Shortage Report Format

Select Sort by Component to sort the Auto Issue Material Shortage Report by componentitem number. Select Sort by Work Order to sort by work order number. Select BothFormats to print the report twice, once sorted by component number and once sorted bywork order number. Select None if you do not want to print the Auto Issue MaterialShortage Report. This field is available only if Yes or Available Quantity Only is selectedat the Auto Issue Material Transactions field. NOTE If Manual is selected at the Work Order Issue Method field, materialtransactions are not automatically created.

Auto Generate Labor Transactions

Select the Auto Generate Labor Transactions check box to automatically create labortransactions for work orders on their release if Automatic is selected at the Work OrderIssue Method field and for work orders on their completion if Backflush is selected at theWork Order Issue Method field. This option is available for all cost completion methods. NOTE If Manual is selected at the Work Order Issue Method field, labortransactions are not automatically created.

Auto Generate Outside Processing

Select the Auto Generate Outside Processing check box to automatically generate outsideprocessing transactions for work orders on their release if Automatic is selected at theWork Order Issue Method field and for work orders on their completion if Backflush isselected at the Work Order Issue Method field. This option is available for all costcompletion methods. NOTE If Manual is selected at the Work Order Issue Method field, outsideprocessing transactions are not automatically created.


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Print Missing Cost Report

Select Yes to include this report on the Completion/Close Selection window as part of theWork Order Transaction Journal update. Select No to exclude this report. Select OneW/O per Page to print one work order per page. Missing costs can be caused bytransactions not being entered or by the actual cost being less than the planned cost.

Minimum Variance Percent to Print

Type the percentage used to indicate a missing cost entry. Any completed work order thatshows cost variances that are less than the planned cost, and the variance is equal to orgreater than the percentage entered here, prints on the Completion Missing Cost Reportor the Close Missing Cost Report, depending on whether the selection for this option ismade in the Completion or Close section on the Work Order Options Additional tab. Thisfield is available only if Yes or One W/O per Page is selected at the Print Missing CostReport field.

Print Var from Standards Rpt

Select Yes to include this report on the Completion/Close Selection window as part of theWork Order Transaction Journal update. Select No to exclude this report. Select OneW/O per Page to print one work order per page. Any completed work order that shows acost variance from the planned cost, and the variance is equal to or greater than the


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percentage entered at the Minimum Variance Percent to Print field, prints on theCompletion Variance From Standards Report or the Close Variance From StandardsReport, depending on whether the selection for this option is made in the Completion orClose section on the Work Order Options Additional tab.

Minimum Variance Percent to Print

Type the percentage that a work order must vary in order to be printed on the CompletionVariance From Standards Report or the Close Variance From Standards Report,depending on whether the selection for this option is made in the Completion or Closesection on the Work Order Options Additional tab. Any completed work order that showsa cost variance from the planned cost applied, and the variance is equal to or greater thanthe entered percentage, prints on the report. This field is available only if Yes or OneW/O per Page is selected at the Print Var from Standards Rpt field.

Print Back Order Fill Report

Select the Print Back Order Fill Report check box to print the Back Order Fill Reportfollowing the Work Order Transaction Journal update if completion transactions areentered. Clear the check box if you do not want to print the report. The Back Order FillReport prints the back orders that can be filled from completed work orders.

Print WO Close Cost Ledger

Select Yes to include this report on the Completion/Close Selection window as part of theWork Order Transaction Journal update. Select No to exclude this report. Select OneW/O per Page to print one work order per page. The Work Order Close Cost Ledger

shows all transactions posted to the work order since it was opened. This option isavailable only if the Retain Work Order Transaction Detail check box is selected on theWork Order Options Main tab.

Max Number of Months to Schedule

Type the maximum number of months that work order scheduling can be performedwithout interruption. If work order scheduling exceeds the maximum number of months,a warning message appears; however, scheduling can still proceed.NOTE If no maximum number is entered, or if a large number of months is entered,scheduling can take a considerable amount of time to perform.

Print Work Order Labels

Labels print following the Work Order Transaction Journal update if completiontransactions are entered. Select the type of items for which work order labels will beprinted.

Explode Sub-Assemblies During Work Order Entry


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Select the Explode Sub-Assemblies During Work Order Entry check box to explodesubassemblies during Work Order Entry. Clear the check box if you do not want toexplode subassemblies during Work Order Entry. Your selection at this option appears asthe default response in Work Order Entry. This field is available only if the Bill ofMaterials module is integrated with Work Order and if Material Requirements Planning

is not installed.

Require Departments for Employees

Select the Require Departments for Employees check box to include a two-digitdepartmental identification number as the leading component of all production employeenumbers. Clear the check box to exclude the departmental identification number. If youuse departments in the Payroll module, selecting this check box allows you to use thesame type of numbers assigned to payroll employees.

Retain Work Order Line Detail

Select the Retain Work Order Line Detail check box to retain line detail, summaryquantities, and costs for each step and each component. Clear the check box if you do notwant to retain this information. This field is available only if the Retain Work OrderHistory check box is selected.

History Purge Option Password


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Type the password to be used to purge production history in the Work Order HistoryReport task. If you do not want to secure the Purge option, leave this field blank.

Next Automatic Work Order Template Number

Type the next work order template number to be assigned when using the AutomaticTemplate Number feature in Work Order Entry. A template is a standardized method formanufacturing a product that can be copied to create new work orders.

Number of Days to Retain Closed Work Orders

Type the number of days to retain closed work orders in the Open Work Order file untilWork Order Purge is performed. Enter 0 (zero) to purge work orders immediately after aclose transaction is entered.

Data Type

Select Date to define this user-defined field as date oriented. Select Text to define thisuser-defined field as text oriented. As you establish the record for each work order inWork Order Entry, you can enter text at each field defined as text oriented, and you canenter a date at each field defined as date oriented. If you leave a User-Defined FieldDescription field blank during this setup, that sort field is not available during data entryor report printing.

Retain Work Order History

Select the Retain Work Order History check box to retain work order history information.

The header, completion, and memo information for work orders is retained; thisinformation can be printed on the Work Order History Report and viewed using WorkOrder History Inquiry. Clear the check box if you do not want to retain this information.

Retain Transaction History

Select the Retain Transaction History check box to retain transaction history information;this can require a large amount of disk storage space. Clear the check box if you do notwant to retain this information. This field is available only if the Retain Work Order LineDetail, Retain Work Order History, and Retain Transaction Work Order Detail checkboxes are selected.

User-Defined Fields (1 through 4) Description

Type a description for each user-defined field. These fields are used to categorize workorders by type or to indicate additional dates. The user-defined fields can be used to sortinformation on reports. Each description entered appears as a field name on the WorkOrder Entry Header tab.


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Cost Completion Method

Select a cost completion method to determine which costs are used to calculate thecompletion unit cost. Select one of the following methods:NOTE If Automatic or Backflush is selected at the Issue Method field on the Work Order

Entry Header tab and the Auto Generate Labor and Auto Generate Out-Process checkboxes are selected on the Work Order Entry Additional tab, labor and outside processingtransactions are automatically created for work orders. Actual: The completion unit cost is based on the costs updated to the Work inProcess accrual account.Work orders created with the Manual or Backflush issue method have a zero balance inthe Work in Process accrual account after each completion entry is recorded. Whether thecost in the Work in Process accrual account represents the full-planned quantity or apartial quantity, the system assumes that all costs applicable to the completion entry areentered and that the cost in the Work in Process accrual account represents only thatcompletion entry. For example, if the planned quantity for the work order is 100 items

and you are processing a completion entry for the first 50 items, 100 percent of the cost inthe Work in Process accrual account is used in the completion calculation for the 50items.Work orders created when Automatic is selected at the Issue Method field on the WorkOrder Entry Header tab use the work order percent complete amount to allocate the costsupdated to the Work in Process accrual account before the completion entry is recorded.This method leaves a zero balance in the Work in Process accrual account when the lastcompletion entry for the work order is recorded. Planned: The completion unit cost is based on the standard costs that arecalculated when the work order is created. The work order percent complete is used tocalculate the cost for each completion. The Planned cost completion method may alsocreate a positive or negative balance in the Work in Process accrual account if Yes orAvailable Quantity Only is selected at the Auto Issue Material field and the AutoGenerate Labor and Auto Generate Out-Process check boxes are selected on the WorkOrder Entry Additional tab, and the automatically created material, labor, and outsideprocessing transactions are edited. The automatically created transactions are based onthe standard costs (calculated when the work order is created), and if they are edited, thevariances between the standard costs and the edited costs are posted to the Work inProcess accrual account. These variances are ignored by the completion calculationwhich always uses the standard costs. Lower of Plan/Actual: This method checks each step of the work order todetermine if the standard or the actual cost is lower. The lower cost for each stepdetermines which method is used to calculate the completion costs. If the standard cost islower, the completion cost is calculated using the Planned Cost Completion method. Ifthe actual cost is lower, the completion cost is calculated using the Actual CostCompletion method. This method leaves a zero balance in the Work in Process accrualaccount when the last completion entry for the work order is recorded.


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Work Order Scrap

Enter the general ledger account number to be debited when a portion of a work order isscrapped. Click the Lookup button to list all general ledger account numbers. Anyremaining costs in "work in process" after all work order completion transactions areprocessed are debited to this account when the work order is closed.

Default WIP Direct

Enter the general ledger account number to be used in Work Order Transaction Entry topost the direct cost of work in process (material, labor, and outside processing costs).Click the Lookup button to list all General Ledger account numbers.

Default WIP Variable Overhead

Enter the general ledger account number to be used in Work Order Transaction Entry topost the work-in-process variable overhead amount. Click the Lookup button to list allGeneral Ledger account numbers.

Default Applied Fixed Overhead


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Enter the general ledger account number to be used as the offsetting account to the Workin Process Fixed Overhead account for posting fixed overhead costs. Click the Lookupbutton to list all General Ledger account numbers.

Default Special Item Purchases

Enter the general ledger account number that will appear as the default in Work OrderTransaction Entry when posting completion transactions for noninventory items. Clickthe Lookup button to list all General Ledger account numbers. This account is debitedwith the value of any special items being completed.

Default WIP Fixed Overhead

Enter the general ledger account number to be used in Work Order Transaction Entry topost the work-in-process fixed overhead amount. Click the Lookup button to list allGeneral Ledger account numbers.

Default Applied Direct

Enter the general ledger account number to be used as the offsetting account to the Workin Process Direct account for most labor or machine operations. Click the Lookup buttonto list all General Ledger account

Default Applied Variable Overhead

Enter the general ledger account number to be used as the offsetting account to the Workin Process Variable Overhead account for posting variable overhead costs. Click the

Lookup button to list all General Ledger account numbers.


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2. Work Center Maintenance

Queue Time

Queue time is the number of hours that a work order sits in front of a work center beforeit starts. It also includes the "move" time required to physically move partially completeditems from the previous operation to the next work center. Queue time is expressed inproduction hours. Increasing the queue time can reduce the number of hours committed atoverloaded work centers. Queue time is used only for scheduling purposes and does notaffect the work center capacity.In most manufacturing companies, the actual "lead time" through the shop is composedof over 90 percent queue time. By varying the amount of queue time you plan into yourwork orders, you control the planned lead time of a job. Queue time is typed at the QueueTime field in the Work Center Maintenance window.Queue time does not necessarily apply to all operations performed at a work center.Typically, a "setup" operation has the queue time applied to it, and is then followedimmediately by one or more operations that can be performed without any additionalwait. You can control whether queue time is used for an operation using the IgnoreQueue Time check box in Operation Code Maintenance or Routing Maintenance.

NOTE The queue time affects the number of operational hours available at a work centerfor the purpose of scheduling a work order, but is not included in the total scheduledhours for the purpose of determining work center capacity.


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Efficiency Percentage

Type the percentage of efficiency for this work center, taking into account any necessaryadjustments for changes in personnel or equipment. This percentage is used to calculatethe amount of time to schedule for an operation.

This percentage is used to reflect maintenance problems and other factors that can reducethe actual production capacity. If a work center is working at full capacity, this fieldshould be set to 100 percent. For scheduling purposes, the number of hours available forproduction at a work center is calculated as follows:(Standard Work Center Hours for Day x Work Center Efficiency Percent) / 100This percentage should be maintained regularly to reflect the current status of the workcenter. Typically, the work center efficiency percentage should be at 100 percent toreflect the normal productivity of the work center. If a work center normally has twomachines in operation and one of the machines is down for maintenance, the efficiencyfor the work center is reduced to 50 percent.

Min Scheduling Time Period

Enter the minimum number of minutes expected for the completion of any operation atthis work center. This time period is used in calculating schedules in Work Order Entry.This prevents scheduling of unrealistically short time periods when small quantities ofcomponents are processed.

Standard Hours Available in Work Center

Type the number of hours that this work center is available for operation on each day ofthe week. If no hours are entered for any day, a default of 8 hours for each day is used for

Monday through Friday.NOTE The number of hours entered must be consistent with the method you employ fordefining operation codes for this work center. If you define the production rate for thiswork center on the basis of each machine in Operation Code Maintenance, you wouldenter 32 for 4 machines that are available 8 hours per day, and enter 4 at the Number ofWorkers/ Machines field. If, however, you define the production rate based on all 4machines as a single unit, you would enter 8, and enter 1 at the Number ofWorkers/Machines field.Production rates are defined by hours per operation, hours per lot, or operations per hourin Operation Code Maintenance.


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3. Operation Code Maintenance

On the Work Order Setup menu, click Operation Code Mainenance. Operation CodeMaintenance provides you with flexibility in determining how costs and overhead arecalculated and what general ledger accounts are used to post production costs. Operationcodes define the various processes that are performed to manufacture the final product orparent item. Operation codes are defined separately for each work center to identify thefactory or shop location at which operations are performed.NOTE You must set up at least one operation code.Each of the work centers defined using Work Center Maintenance is capable ofperforming one or more operations. Use Operation Code Maintenance to define theseoperations for each work center, enter standard cost rates for the operations, assigngeneral ledger accounts associated with each operation to post production costs, anddefine overhead calculation rates. Maintaining this information for each operation codeprovides you with complete flexibility.If the Charge Labor at Employee Rate check box is selected in the Work CenterMaintenance window for the work center, the rate per hour entered at the Planned Costfield is used only to calculate the planned cost. Actual cost is calculated using the rateentered at the Standard Labor Rate field in Production Employee Maintenance. ThePlanned Cost field is normally used only for labor or machine operations. You can leavethe Planned Cost fields blank for outside process steps because the standard rate(s) canvary from work order to work order based on individual bids. Overhead can be applied tolabor, material, and/or outside processing costs. By applying overhead based on hours,overhead is applied on labor only. By applying overhead based on cost, overhead is


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applied to labor costs plus any material and outside processing costs applied to this line.Click Copy to copy operation information from another work center and/or operation.Click Accounts to define general ledger accounts to debit and credit with productioncosts. Click the Printer button to print a listing of all or a specific range of operationcodes.

Work Center

Enter the work center code representing the work center to add or maintain. Click theLookup button to list all work centers. A new work center can be added "on the fly." Awindow similar to the Work Center Maintenance window appears; some nonessentialfields are omitted to speed data entry. Access Work Center Maintenance at a later time tocomplete the remaining entries for the new code.

Ignore Queue Time

Select the Ignore Queue Time check box to ignore any scheduled queue time assigned tothis work center in Work Center Maintenance for this operation. Clear the check box toaccept the queue time assigned to this work center for this operation. Queue time is notused in the calculation of the time required to complete an actual work order step. Queuetime is used during the scheduling process. The setting at this field will be the default inRouting Maintenance and Work Order Entry.

Planned Cost Divisor

Type the divisor that will be used to determine the actual rate per hour and/or rate perpiece to apply for the operation.

Example: If your planned cost rate is typically $1.50 per 1000 pieces, you would enterthe planned cost rate as 1.50 per piece and a planned cost divisor of 1000. This applies$0.0015 per piece when the operation is processed.

Variable Overhead

Type the variable overhead rates to charge. Variable overhead can be used to allocateoverhead costs that vary with the level of production, such as electricity and otherutilities.NOTE Overhead can be applied to labor, material, and/or outside processing costs. Byapplying overhead based on hours, overhead is applied on labor only. By applying

overhead based on cost, overhead is applied to labor costs plus any material and outsideprocessing costs applied to this line.

*** The ability to add codes on the fly allows you to complete the data entry process inan efficient, uninterrupted manner. When performing Operation Code Maintenance, youcan enter new work center codes. When performing Routing Maintenance and WorkOrder Entry, you can enter new work center codes and new operation codes. Whenperforming Work Order Entry, you can enter new inventory items.


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If you are entering a new work center code, the window that appears is similar to theWork Center Maintenance window. If you are entering a new operation code, the windowthat appears is similar to the Operation Code Maintenance window. If you are copyingfrom an operation code, you must also enter the appropriate work center code. Youcannot establish new work centers or operation codes using Work Order Entry if Routing

Maint or None is selected at the Addition of Work Centers and Op Codes option in WorkOrder Options.

Operation Code

Enter the operation code representing the operation to assign to the specified work center.Click the Lookup button to list all operation codes. You can use up to five alphanumericcharacters to identify each operation code.To establish a standard set of operation codes for use by all work centers, first establish adefault or master work center (for example, STND or MAST) and define all of theoperation codes for that work center. The Copy button can be used to copy these standard

operation codes whenever a new operation code is created for a work center. This methodis especially useful if the same rates and general ledger accounts are used for eachoperation code, regardless of the work center.

Run Time Format

Select Hours/Operation to calculate operation run time in terms of hours per operation;select this option if it takes more than an hour to complete one operation. Select Lot tocalculate operation run time as a fixed amount of time per lot (for example, a setupoperation); select this option if an operation always takes a fixed amount of time. SelectOperations/Hour to calculate operation run time in terms of operations per hour; select

this option if you complete more than one operation per hour.

Planned Cost

Type the standard rate per hour and/or rate per piece to charge for this operation. You canenter either rate or both rates. For example, you can charge $20.00 per hour for a machineplus $0.05 per piece.If the Charge Labor at the Employee Rate check box is selected for the work center inWork Center Maintenance, the rate per hour entered here is used only to calculate theplanned cost. Actual cost is calculated using the rate entered at the Standard Labor Ratefield in Production Employee Maintenance.NOTE This field is normally used only for labor or machine operations. You can leavethese fields blank for outside process steps because the standard rate(s) can vary fromwork order to work order based on individual bids.

Fixed Overhead

Type the fixed overhead rates to charge. Fixed overhead can be used to allocate factoryoverhead costs that do not vary with the level of production, such as rent and taxes.


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WIP Direct Account

Enter the Work In Process account to debit with the direct cost of material, labor, andoutside process costs. This account is debited with the actual amount, regardless ofwhether the item produced is valued at standard or actual cost. When a work ordercompletion transaction is processed, any variance is recognized for a standard cost valueditem.

WIP Variable Overhead Account

Enter the Work In Process Variable Overhead account to debit with the overhead amountbased on the definition of variable overhead for this operation code.

Applied Fixed Overhead Account

Enter the Applied Fixed Overhead account to credit with the fixed overhead costs appliedto the work order. This account offsets the Work In Process Fixed Overhead account. Ifthe Fixed Overhead fields in Operation Code Maintenance are blank, this field can beskipped.

WIP Fixed Overhead Account

Enter the Work In Process Fixed Overhead account to debit with the overhead amount

based on the definition of fixed overhead for this operation code.

Applied Direct Account

Enter the Applied Direct account to credit with the direct cost of this operation. Thisaccount offsets the Work In Process account for most labor or machine operations.

Applied Variable Overhead Account


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Enter the Applied Variable Overhead account to credit with the variable overhead costsapplied to the work order. This account offsets the Work In Process Variable Overheadaccount. If the Variable Overhead fields in Operation Code Maintenance are blank, thisfield can be skipped.

***FACTORY OVERHEAD

There are three components of the total cost of manufacturing finished products: directmaterials, direct labor, and factory overhead. Direct materials represent the cost of thematerial that is directly used in manufacturing a product. Direct labor represents thewages of employees who worked to convert the raw material into the finished products.Factory overhead includes all of the remaining costs of operating the factory, includingpower, heat, lights, taxes, insurance, depreciation on the equipment, maintenance relatedto the factory and equipment, supplies, and support and supervision wages.The costs associated with factory overhead are those costs that are necessary to supportthe manufacturing process but cannot be directly attributed to a single job. Even though

factory overhead cannot be specifically identified with individual jobs, it is as much apart of the manufacturing costs as direct materials and labor. In many cases, factoryoverhead can be the largest cost of manufacturing.

FACTORY OVERHEAD RATE EXAMPLES

To illustrate the process of determining factory overhead rates, assume that acompany's whole plant is under one roof, and has only one work center. Assumealso that there are five, full-time production employees in the plant.The total fixed costs that will be incurred in the new year are calculated asillustrated below.

Shop Supervision $45000.00

Rent 72000.00

Insurance 15000.00

Depreciation 51800.00

Total Fixed Costs $183800.00

Because the variable costs vary depending on the amount of production, the costsfor the year are calculated based on different percentages of full productioncapacity, as illustrated below.

Percentage of Capacity 80% 90% 100%


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Indirect Labor $12800.00 $14400.00 $16000.00

Variable Utilities 4800.00 5400.00 6000.00

Maintenance 2240.00 2520.00 2800.00

Total Variable Costs $19840.00 $22320.00 $24800.00

Now that total costs have been determined, overhead rates can be calculated. Forthis example, direct labor hours are used as the basis for determining the rates. Thismethod is historically the most common basis of calculating factory overhead. Inthis example, if the factory is utilized at 100 percent capacity, there will be 10,000hours of direct labor.

Dividing the total fixed costs and total variable costs by the number of hoursdetermines the rate per hour to be used. The number of labor hours and the

resulting rate per hour will be different based on the production capacity of thefactory as illustrated below.

Percentage of Capacity 80% 90% 100%

Total Fixed Costs $183800.00 $183800.00 $183800.00

Divided by Labor Hours 8000 9000 10000

Fixed Overhead per Hour $22.98/HR $20.42/HR $18.38/HR

Total Variable Costs $19840.00 $22320.00 $24800.00

Divided by Labor Hours 8000 9000 10000

Variable Overhead per Hour $2.48/HR $2.48/HR $2.48/HR

If the projection for the year is to use 100 percent capacity of the factory, the fixedoverhead rate of $18.38 per hour and variable overhead rate of $2.48 per hourshould be used.

As this example shows, the variable overhead rate is a fixed rate, regardless of the

percentage of production capacity that is assumed; however, the fixed overheadrate varies with the percentage of production capacity. The application of anyoverhead rate only approximates the actual overhead costs. Over time, there will beeither an under- or over-application of overhead to work in process.


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Defining Fixed and Variable Components of Factory Overhead

Some of the costs included in factory overhead are fixed costs that do not vary with theamount of production. Costs such as rent, property taxes, and depreciation are commonlytermed "fixed overhead costs."

Other costs, such as the amount of electricity or gas consumed in furnaces to heat parts orthe amount of lubricating oil used for machinery, depend on how many hours theequipment is actually producing product. These costs are called "variable overhead costs"because they vary with the amount of product produced.While it is acceptable from an accounting standpoint to apply factory overhead at the endof the accounting period, this does not allow for timely reporting of manufacturing costswhen work orders are completed to inventory. Instead, it is customary to apply factoryoverhead to each production order using predetermined factory overhead rates.The Work Order module allows you to define both fixed and variable overhead rates, andto base them on hours, a percentage of cost, or a combination of both. The overhead ratesare maintained for each operation code using Operation Code Maintenance. This option

allows you to maintain separate overhead rates for different operations performed at thesame work center.

Adjusting Factory Overhead Rates

Because factory overhead rates are an approximation of actual overhead costs, there willbe either an under- or over-application of overhead to work in process. It is important tomonitor the overhead costs allocated so that overhead rates can be fine-tuned to reflectactual costs more accurately.All factory overhead costs allocated to work orders are posted to the general ledger usingthe Applied Fixed Overhead and Applied Variable Overhead accounts defined for the

operation code in Operation Code Maintenance. Reviewing the amounts posted to theseaccounts allows you to monitor the accuracy of the factory overhead rates.Because a separate account can be assigned to each operation code, you can post theapplied overhead amounts to the General Ledger in as much detail as you want. Usually,it is useful to post to different Applied Overhead accounts by work center. It is stronglyrecommended that different accounts be used for the applied fixed overhead and appliedvariable overhead amounts.When recording actual factory overhead costs to the General Ledger, you can debit theApplied Overhead accounts. At the end of each period, any remaining balance in theseaccounts shows how much overhead has been over-applied or under-applied. Any creditbalance remaining in the Applied Overhead accounts indicates an over-applied overheadamount. Periodically, you should adjust your overhead rates to minimize the amount ofover- or under-application of overhead. At the end of a period, you can clear anyremaining balance in the Applied Overhead accounts by transferring the balance to theCost of Goods Sold account. You should consult with your CPA to determine the bestmethod for handling factory overhead and the associated general ledger postings.


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**Work Order Quantity and Time Calculations

Calculating Quantity Planned

All extended quantity calculations for the work order are based on the quantity planned.

The Qty Planned field on the Work Order Entry Header tab is calculated by applying theyield percentage to the quantity ordered.The calculation for the quantity planned is:Quantity Planned = Quantity Ordered / Yield Percentage

Calculating the Extended Quantity

The extended quantity is the amount of the component item that is planned to be used forthe work order. The Extended Qty field on the Work Order Entry Materials tab iscalculated by multiplying the quantity per parent by the quantity planned, and factoringthe scrap percentage of the component item.

The calculation for the extended quantity is:Extended Quantity = Quantity Planned * Quantity per Parent / (1 - Scrap Percentage)

Calculating the Extended Time Per Step

The Extended Time field on the Work Order Entry Operations tab is calculated based onthe standard run type, run time, parent item type, and factor specified for a step, alongwith the number of parent items to be produced (for example, finished products orsubassemblies) to determine the total time required to perform a step.The Standard Run Type field on the Work Order Entry Operations tab identifies how therun time for the step is defined.

Select Hours per Operation to express the standard run time in terms of hours peroperation. Select Fixed Time per Lot to express the standard run time as a fixed amount oftime per lot, regardless of the quantity produced. Select Operations per Hour to express the standard run time in terms of operationsper hour.The standard run type defaults to the Hours/Operation, Hours/Lot, or Operations/Hourfield specified for the operation code for the step but can be overridden in either RoutingMaintenance or Work Order Entry. Depending on the standard run type selected, you canspecify either hours per operation, hours per lot, or operations per hour to indicate howmuch time is required per operation.Generally, if it takes more than 1 hour to complete one operation, Hours per Operation isthe most convenient method to use. If you complete more than one operation per hour,the Operations per Hour method is the most convenient.The Parent Item Type field and the Factor field on the Work Order Entry Operations tabdefine how many parent items can be processed per operation. Select Operations/Parent ifthe operation must be performed more than once to produce one parent item. You canenter the number of times the step operation must be performed per parent item at theFactor field. Select Parents/Operation if performing this operation once produces more


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than one parent item. You can enter the number of parent items that are produced eachtime the step operation is performed at the Factor field. If the standard run type is FixedTime per Lot, both fields are ignored because the step is performed only once per workorder, regardless of the number of parent items produced.


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4. Production Employee Maintenance

On the Work Order Setup menu, click Production Employee Maintenance to defineemployee numbers to be used for posting labor against a work order. For each productionemployee, the employee's name, employee number, standard labor rate, and socialsecurity number are entered.

Standard Labor Rate

Type the employee's standard labor rate per hour. This rate is used for the calculation of

labor cost in the Labor Transaction Register update.NOTE An entry at this field is optional, depending on your selection at the Charge Laborat Employee Rate check box in the Work Center Maintenance window.


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5. Labor Crew Maintenance

On the Work Order Setup menui, click Labor Crew Maintenance to group productionemployees defined using Production Employee Maintenance into labor crews. Usingthese predefined labor crews saves time when labor transactions are entered against workorders. An existing labor crew can be maintained at any time. Production employees canbe added and removed from the crew, as required.NOTE You must enter at least one employee in a crew.If labor is charged at the employee rate, all the employees' rates are added together tocalculate the rate per hour. For example, if you enter an amount for the labor at theStandard Labor Rate field in the Production Employee Maintenance window, the labor

rate for each of the three employees will be combined.


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6. Shop Calendar Maintenance

On the Work Order Setup menu, click Shop Calendar Maintenance to maintain a shopcalendar for an entire shop and/or for individual work centers. Shop calendar entries areused for scheduling in Work Order Entry to indicate when a shop as a whole, orindividual work centers in a shop, will be open or closed. All shop calendar entries areautomatically sorted by date.Click Default to enter the default calendar dates for the entire shop. These dates apply toall work centers within the shop unless these dates are overridden for individual workcenters to account for special circumstances (for example, if a particular work center isopen for part or all of a holiday for which other work centers are closed).

Start/End Date

Enter the starting or ending date that the work center will be nonoperational (for example,the first day of a seasonal holiday), or the starting or ending date that the work center willbe operational while other work centers in the shop are closed. If you are entering defaultshop calendar dates, enter the starting or ending date that the shop will be nonoperational.

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Select the Active check box if the work center will be available for work during the rangeof dates entered. Clear the check box if the work center will be nonoperational during therange of dates entered. This field is available only if you are not entering default shopcalendar dates.


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7. Tooling Maintenance

On the Work Order Setup menu, click Tooling Maintenance to define tools that are used

during steps on work orders. An identification number and corresponding description isdefined for every tool that is used in the production operation. Tool numbers can beassigned to work order steps. When the step is scheduled, the tool is also scheduled.

**Tooling Requirements Report

On the Work Order Reports menu, click Tooling Requirements Report. The ToolingRequirements Report lists tool requirements by date for work orders with scheduled toolusage. This report allows you to review tooling requirements prior to performing theactual tooling. Tooling requirements are printed in tool number order up to the specifiedcutoff date. If tooling is entered on a step and the step has started, the scheduled hours

printed represent only the tool usage time remaining. This report can be printed forscheduled tool hours and quantities.


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Parkinson Accounting Systems Work OrderEntry

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MAS 90 & MAS 200 TRAINING CLASS

Work Order

1. WORK ORDER ENTRY

Work Order Entry (Header)

On the Work Order Main menu, click Work Order Entry to create and maintain workorders. A work order is used to authorize shops to manufacture subassemblies andfinished products, and details how subassemblies and products are manufactured. Byentering a work order, you define what material and processes are required tomanufacture the product. Work Order Entry brings together material plans defined using

the Bill of Materials module with the manufacturing plans defined in RoutingMaintenance to create a complete plan for manufacturing the product.Before entering work orders, if you are currently using a manual work order system or adifferent computerized system, you will need to perform certain preliminary data entryprocedures to ensure that your system is current.In the process of entering the work order, standard time and cost information arecalculated to determine the planned costs to use to measure the efficiency of themanufacturing process. The planned costs are compared against the actual costrecorded against the work order to provide variances from standard costs.


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In addition to standard work orders, Work Order Entry allows you to enter work ordertemplates, which are used for creating standard work orders. Work order estimates canalso be entered to determine the time required to build an item and its associated costs.Estimates will not commit the quantity required for the work order for the components.

After an estimate has been created, it can be printed on work order travelers, pickingsheets, dispatch sheets, operation tickets, the Open Work Order Report, and theScheduled Capacity Report. To convert the estimate to a firm-planned work order, recallthe estimate by work order number and change the status to "firm planned." Theinventory quantity required for the work order for the components is adjusted at this time.Based on the selection at the Make For field on the Header tab, work orders can bechanged to inventory, work order, or sales order when work order completiontransactions in Work Order Transaction Entry are processed.Click Defaults to set the Work Order Entry default values. Click the Printer button to printWork Order Travelers. Click the Memo button to create and maintain memos containinginformation pertinent to a work order.

**CREATE AND USE A WORK ORDER TEMPLATE

A template is a basic work order form, including the material and routing definitionsrequired to complete one finished product, from which standard work orders can becreated. Templates cannot accumulate costs or be released to the shop. Due datescannot be assigned to templates, and templates, travelers, and picking sheets cannot beprinted. In addition, you cannot assign a work order template to a sales order or toanother work order. Work order templates are identified by a work order numberbeginning with the letter "T." All work orders that do not begin with the letter "T" areconsidered to be standard work orders.

To create a work order template

1 On the Work Order Main menu, click Work Order Entry. The Work Order Entrywindow appears.

2 At the Work Order Number field, enter a work order number that starts with theletter "T."

3 Complete the information for the template in the same manner as a standardwork order. You cannot enter scheduling information for a template.

To use a work order template

1 On the Work Order Main menu, click Work Order Entry. The Work Order Entrywindow appears.

2 At the Work Order Number field, enter a new work order number.

3 At the Copy From field, enter the predefined work order template number to copythe template information.


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Explanation of Steps and Substeps

The Work Order module uses the step number to identify a single operation that isperformed during the manufacturing process. A step can be an assembly step, aninspection step, a painting step, etc. Each step is assigned a specific operation codeperformed at a specific work center and takes a predefined amount of time. The

sequence of the step numbers controls the order in which these operations areperformed.

Make For

Select Inventory to make the finished product for inventory. Select Work Order to makethe finished product for use by another work order. Select Sales Order to make thefinished product in response to a sales order. This option is available only if the SalesOrder module is integrated with Work Order.If the finished product is needed for multiple work orders or sales orders, you can selectInventory or select Work Order or Sales Order to indicate the type of order that requiresthe largest quantity to be made. If you are entering a work order template, this field willnot appear.NOTE Regardless of the entry at this field, work orders can still be completed toinventory, to another work order, or to a sales order using work order completiontransactions in Work Order Transaction Entry.

Item/Bill No.

Enter the item number or bill number of the finished product. Click the Lookup button tolist all item numbers. Special (noninventory) items can be entered by preceding the itemnumber with an asterisk (*). A bill number can be entered at this field only if the Bill ofMaterials module is installed.

Revision

Enter the bill revision of the item to be produced by the current work order. Click theLookup button to list all revisions for the current bill. This field is available only if youentered a bill number at the Item/Bill No. field, the Bill of Materials module is installed,and the Use Bill Revision Codes check box is selected in the Bill of Materials Optionswindow.

Option Code

Enter the option codes used to define the finished product. Click the Search button to

display the Option Selection window for the current bill. This field is available only if youentered a bill number at the Item/Bill No. field, if the bill has options defined, if the Bill ofMaterials module is installed, and if the Use Option Bills or Bill Has Options check box isselected in the Bill of Materials Options window.

Qty Ordered

Type the quantity of the finished product to be produced by the current work order. If youare entering a work order template, this field defaults to 1.


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The quantity entered at this field is verified against the quantity entered at the MaximumLot Size field on the Bill of Materials Header tab. If the quantity ordered is higher thanthe lot size, a warning dialog box appears.NOTE The placement of the decimal point for quantity entries for inventory items isbased on the entry format established in Inventory Management Options.

Yield %

Enter a yield percentage for the finished product. You must enter a positive number from1 to 100. The yield percentage is used to determine the quantity of finished products thatmust be produced to compensate for anticipated manufacturing losses.

Issue Method

Select an issue method to determine how material, labor, and outside processingtransactions are created.

**Explanation of Issue Methods

Material, labor, and outside processing transactions are automatically issued to a workorder when using the Automatic or Backflush issue method. Use the Manual issuemethod to manually issue material, labor, and outside processing transactions to a workorder.

1. The Automatic issue method automatically issues material, labor (if the AutoGenerate Labor check box is selected on the Work Order Entry Additional tab), and

outside processing (if the Auto Generate Out-Process check box is selected on the WorkOrder Entry Additional tab) transactions to the work order at the time the work order isreleased.The Automatic issue method allows for more accurate material, labor, and outsideprocessing usage planning so that shortages can be discovered and accounted for earlyin the manufacturing process. You can specify the Automatic issue method for a workorder by selecting Automatic at the Issue Method field on the Work Order Entry Headertab.Use the Automatic issue method to generate material, labor, and outside processingtransactions automatically when the work order is released. Material, labor, and outsideprocessing transactions are issued if Yes or Available Quantity Only is selected at theAuto Issue Material field and the Auto Generate Labor and Auto Generate Out-Process

check boxes are selected on the Work Order Entry Additional tab. Selecting Yes at theAuto Issue Material field issues all component items for a work order automatically whenthe work order is released. Selecting Available Quantity Only at the Auto Issue Materialfield issues component items up to available quantities of those items automatically.When you record a release transaction in Work Order Transaction Entry for a work orderusing the Automatic issue method, the system generates material, labor, and outsideprocessing transactions automatically for the work order after the Work OrderTransaction Journal update is completed. After the release transaction is updated, youcan reselect Work Order Transaction Entry to edit the automatically generated material,


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labor, and outside processing transactions prior to printing the Work Order TransactionJournal and updating to the permanent files.

2. The Backflush issue method automatically issues material, labor (if the AutoGenerate Labor check box is selected on the Work Order Entry Additional tab), and

outside processing (if the Auto Generate Out-Process check box is selected on the WorkOrder Entry Additional tab) transactions to the work order at the time the work order iscompleted.The Backflush issue method is normally used by companies that have a veryshort processing time or are set up as a production line. This method is also useful forcompanies that issue work orders for large quantities of finished goods but completethem over a period of time and pull components from floor stock. By backflushingmaterial, labor, and outside processing transactions at the time of completion, theinventory valuation is more accurately reflected than if these transactions were issuedautomatically at the time of release. You can specify the Backflush issue method for awork order by selecting Backflush at the Issue Method field on the Work Order EntryHeader tab.Use the Backflush issue method when material, labor, and outside processing

transactions are to be automatically generated when entering a completion transaction.Material, labor, and outside processing transactions are issued if Yes or AvailableQuantity Only is selected at the Auto Issue Material field and the Auto Generate Laborand Auto Generate Out-Process check boxes are selected on the Work Order EntryAdditional tab.When you record a work order completion transaction in Work Order Transaction Entryfor a work order using the Backflush issue method, the system generates material, labor,and outside processing transactions for the work order automatically. The quantity ofmaterial issued depends on the quantity of the finished product completed. You can editthe automatically generated material issue transactions before printing the Work OrderTransaction Journal and updating to the permanent files.

3. The Manual issue method allows you to accurately record material, labor, andoutside processing transactions issued to a work order as they are used in themanufacturing process. The increase in the amount of manual data entry required forthis method is offset by the accuracy of inventory valuation and quantity in stock. Youcan specify the Manual issue method for a work order by selecting Manual at the IssueMethod field on the Work Order Entry Header tab.Use the Manual issue method to issue individual material, labor, and outside processingtransactions to the work order. If this method is used, material, labor, and outsideprocessing transactions are issued to a work order by manually recording thesetransactions using Work Order Transaction Entry.

**NOTE Regardless of the issue method specified for a work order, you can

manually enter material, labor, and outside processing transactions in Work OrderTransaction Entry after the work order is released.

Qty Planned

The actual quantity of the finished product that the work order is planned to produceappears. This field is for display purposes only and cannot be changed. The quantityplanned equals the quantity ordered divided by the yield percentage divided by 100. For


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example, if the manufacturing process has a 90 percent yield percentage and thequantity ordered is 100, the quantity planned will be 111. All extended quantitycalculations for components are based on this quantity.

Routing No.

Enter the routing number used to define the steps necessary for the manufacture of thefinished product. Click the Lookup button to list all routing numbers. The routing numberdescribes the steps, the order of the steps, and the work centers at which the steps mustbe performed to transform the raw components into the finished product. The defaultrouting number originates from the Bill master file if you are entering a bill with a routingnumber defined; it originates from the Inventory master file if you are entering a bill withno routing number or if you are entering an inventory item that is not a bill.

Status

Select Firm Planned or Estimate as the status of this work order. If you are maintainingan existing work order, this field is available only if you are changing an estimate to afirm planned order.

Copy From

Enter the work order number from which you want to copy information. Click the Searchbutton (Magnifying Glass) to the far right of the Copy From field to search for a particularwork order by parent item description or user-defined field. If you are entering a workorder template, enter the work order template number from which to copy information.Click the Search button (Flashlight) to list all work order template numbers.

Description

If you are entering a special item, type a description of the finished product. If you areentering an inventory item, the description from the Inventory master file appears andcannot be changed. If you are entering a bill, the bill description from the Bill master fileappears and cannot be changed.

Effective Date

Type the date that the current bill will be effective. All engineering changes through thatdate are included. This option is available only if Bill of Materials is installed or if the UseEngineering Change Control check box is selected in the Bill of Materials Optionswindow.

Parent Whse

Enter the warehouse code to which the finished parent item will be completed. Click theLookup button to list all warehouse codes. This field is available only if the RequireMultiple Warehouses check box is selected in Inventory Management Options, if you arenot entering a special item, and if you are not entering a work order template.


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NOTE You can complete work orders to a different warehouse than the parentwarehouse when entering work order completion transactions in Work Order TransactionEntry.

Component Whse

Enter the warehouse code from which components will be issued. Click the Lookupbutton to list all warehouse codes. This field is available only if the Require MultipleWarehouses check box is selected in the Inventory Management Options window, if youare entering a special item, and if you are not entering a work order template.

Print Pick Sheet

Select the Print Pick Sheet check box to print the picking sheet for the current workorder. If the Print Picking Sheets Upon W/O Release check box is selected in the WorkOrder Options window, the picking sheet will be selected for printing when the workorder is released. If the check box is cleared, the work order must be manually selectedusing Picking Sheet Printing. Clear the check box if you do not want to print the pickingsheet for this work order. This option is available only if the Print Picking Sheet checkbox is selected in the Work Order Options window.

Print Labels

Select the Print Labels check box to print work order labels for the finished product whenthe current work order is completed. Clear the check box if you do not want to print workorder labels. This field is available only if you are not entering a special item. This field isnot available if None is selected at the Print Work Order Labels field in the Work OrderOptions window.

For W/O No. / For S/O No.

If Work Order is selected at the Make For field, the For W/O No. field appears. Enter theparent work order number to which the current work order will be assigned as asubassembly. A work order cannot be assigned to itself, to a template, or to a closedwork order. Click the Lookup button to list all work order numbers. When you haveentered a work order number, the Work Order Line List window appears. Select the lineidentifying the step of the parent work order where the current work order will beassigned as a subassembly item. The step number will appear at the Step field.

If Sales Order is selected at the Make For field, the S/O No. field appears. Enter thecustomer sales order number to which the finished product from the current work order

will be assigned. Click the Lookup button to list all open sales order numbers. When youhave entered a sales order number, the Sales Order Line List window appears. Selectthe line identifying the item detail line of the sales order to which the finished productfrom the work order will be assigned. The customer number and name on the salesorder appear for reference at the Customer field.

NOTE Substeps resulting from option bills and phantom bills from the Bill of Materialssystem are not shown. Work orders cannot be assigned to substeps.


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**Explanation of Steps and Substeps

The Work Order module uses the step number to identify a single operation that isperformed during the manufacturing process. A step can be an assembly step, aninspection step, a painting step, etc. Each step is assigned a specific operation codeperformed at a specific work center and takes a predefined amount of time. The

sequence of the step numbers controls the order in which these operations areperformed.

Step numbers can be defined for a routing using Routing Maintenance. Routing stepsare merged to a work order automatically when the routing is assigned. Step numberscan also be defined directly for a work order on the Work Order Entry Operations tab.When transactions are entered against a work order, you can record unplannedoperations or operations performed at a different work center; however, you must stilldefine at least one planned step for a work order.

If the Bill of Materials module is installed, you can assign a routing number to a bill and astep number to each component item of a bill. The step number indicates when acomponent item is used during the manufacturing process. You can also assign a stepnumber to an option bill and an option interaction to indicate when material associatedwith an option or an option interaction is used.

A step number is a four-digit, zero-filled number. When entering a new step number inRouting Maintenance or Work Order Entry, you can increment the next numberautomatically by clicking the Next Number icon. The step number is incremented by thevalue specified at the Automatically Increment Steps By field in the Work Order Optionswindow. If the step number represented by the next incremented value already exists,the difference between the current step number and the next value is divided by two.

If you are entering the first step number for a new routing, clicking the Next Number iconat the Step Number field on the Work Order Entry Operations tab inserts step number0000 automatically.

If the Bill of Materials module is installed, a work order can be created for a bill thatcontains option bills or phantom bills. Each option bill and phantom bill can be assigneda routing number using Bill of Materials Maintenance. The inclusion of these option orphantom bills in a product may require additional assembly steps with additional routings

that must be merged into the standard routing of a product.

Each component in a bill can indicate the step number where the component is required.If a component is a phantom bill with its own routing requiring additional assembly steps,or if the components are part of an option bill with its own routing requiring additionalassembly steps, those steps are merged into the standard routing as a subrouting.


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The subrouting is identified by a one-character prefix assigned by the systemautomatically. Each subrouting for a main step number is assigned a different substepprefix starting with "A." You can assign up to 26 phantom or option bills to each routingstep, each with its own additional routing steps. The step numbers from the routingassigned to the phantom bill or option bill are assigned as substep numbers following theprefix character.

NOTE All component items associated with a phantom bill or option bill are assigned tothe step number of the main routing. No material can be assigned to a substep number.

Work Order Entry (Additional)

Use the Additional tab to enter additional header information about the work order. If youknow when you want to release the work order, but want to determine when the finishedproduct will be completed, leave the Due Date field blank and type the scheduledrelease date at the Sched Release field. This causes the Forward scheduling method to

be used to calculate the total amount of time needed to complete the finished product.

If you are entering a work order template, the Status Comment, Due Date, Lead Time,Sched Release, and Order on Hold fields are not available.

Status Comment


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Type a description of the work order status, indicating the current manufacturing stage ofthe finished product. This status can be printed using Dispatch Sheet Printing. Thisoption is available only if you are not entering work order templates.

Due Date

Type the date on which the current work order is due. If you selected Work Order at theMake For field, the due date defaults to the scheduled start date of the step of the parentwork order to which the current work order has been assigned. If a different due date istyped, the Backward scheduling method is used to calculate the scheduled release datefor the current work order. You must type a due date or a scheduled release date, butyou cannot type both dates. This option is available only if you are not entering a workorder template.

NOTE If you know when you want to release the work order but you want to determinewhen the finished product will be completed, leave this field blank and enter thescheduled release date at the Sched. Release field. This will cause the Forwardscheduling method to be used to calculate the total amount of time needed to completefinished product.

Lead Time

The lead time necessary to produce the finished product appears. This information is fordisplay purposes only and cannot be modified. Lead time is calculated duringscheduling, after routing and material information has been entered. This field isavailable only if you are not entering a work order template.

Sched Release

Type the date on which the work order is scheduled to be released. You must enter adue date or a scheduled release date, but you cannot enter both dates. If you entered adue date at the Due Date field and you enter a scheduled release date, your entry at theDue Date field is deleted. This field is available only if you are not entering work ordertemplates.

Planner

Enter the code identifying the planner responsible for the finished product. Click theLookup button to list all planner codes. Planner codes are assigned to items usingBuyer/Planner Code Maintenance in Inventory Management.

Order on Hold

Select the Order on Hold check box if the work order is on hold. Clear the check box ifthe work order is not on hold. A work order cannot be released in Work OrderTransaction Entry until this check box is cleared. This field is available only if you are notentering a work order template.

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Select the Explode Sub-Assem check box if you want to explode subassemblies. Clearthe check box if you do not want to explode subassemblies. This field is available only ifthe Material Requirements Planning module is not integrated with Work Order.

Cost Completion Method

Select a cost completion method to determine which costs are used to calculate thecompletion unit cost. Select one of the following methods:

NOTE If Automatic or Backflush is selected at the Issue Method field on the Work OrderEntry Header tab and the Auto Generate Labor and Auto Generate Out-Process checkboxes are selected on the Work Order Entry Additional tab, labor and outside processingtransactions are automatically created for work orders.

Actual: The completion unit cost is based on the costs updated to the Work inProcess accrual account.Work orders created with the Manual or Backflush issue method have a zero balance inthe Work in Process accrual account after each completion entry is recorded. Whetherthe cost in the Work in Process accrual account represents the full-planned quantity or apartial quantity, the system assumes that all costs applicable to the completion entry areentered and that the cost in the Work in Process accrual account represents only thatcompletion entry. For example, if the planned quantity for the work order is 100 itemsand you are processing a completion entry for the first 50 items, 100 percent of the costin the Work in Process accrual account is used in the completion calculation for the 50items.Work orders created when Automatic is selected at the Issue Method field on the WorkOrder Entry Header tab use the work order percent complete amount to allocate thecosts updated to the Work in Process accrual account before the completion entry isrecorded. This method leaves a zero balance in the Work in Process accrual accountwhen the last completion entry for the work order is recorded.

Planned: The completion unit cost is based on the standard costs that arecalculated when the work order is created. The work order percent complete is used tocalculate the cost for each completion. The Planned cost completion method may alsocreate a positive or negative balance in the Work in Process accrual account if Yes orAvailable Quantity Only is selected at the Auto Issue Material field and the AutoGenerate Labor and Auto Generate Out-Process check boxes are selected on the WorkOrder Entry Additional tab, and the automatically created material, labor, and outsideprocessing transactions are edited. The automatically created transactions are based onthe standard costs (calculated when the work order is created), and if they are edited,the variances between the standard costs and the edited costs are posted to the Work inProcess accrual account. These variances are ignored by the completion calculationwhich always uses the standard costs.

Lower of Plan/Actual: This method checks each step of the work order todetermine if the standard or the actual cost is lower. The lower cost for each stepdetermines which method is used to calculate the completion costs. If the standard costis lower, the completion cost is calculated using the Planned Cost Completion method. Ifthe actual cost is lower, the completion cost is calculated using the Actual Cost


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Completion method. This method leaves a zero balance in the Work in Process accrualaccount when the last completion entry for the work order is recorded.

The selection at the Cost Completion Method field on the Work Order OptionsUser-Defined tab determines the default setting at this field, but can be changed.

Auto Issue Material

Select Yes to generate material issue transactions for components when work ordersusing the Automatic issue method are released in Work Order Transaction Entry, orwhen completion transactions are entered for work orders using the Backflush method.Select No if you do not want to generate material issue transactions automatically.Select Available Quantity Only to generate material issue transactions for componentsup to the available quantity of each component item when the Automatic issue method isused for the work order.

The default setting at this field is determined by the selection at the Auto Issue MaterialTransactions field on the Work Order Options Main tab, but can be changed.This field is available only if Automatic or Backflush is selected at the Issue Method fieldon the Work Order Entry Header tab.

Auto Generate Labor

Select this check box to automatically create labor transactions for work orders on theirrelease if Automatic is selected at the Issue Method field and for work orders on theircompletion if Backflush is selected at the Issue Method field. This option is available forall cost completion methods.

The default setting at this check box is determined by the selection at the Auto Generate

Labor Transactions check box on the Work Order Options Main tab.

This check box is available only if Automatic or Backflush is selected at the IssueMethod field on the Work Order Entry Header tab.

Auto Generate Out Process

Select this check box to automatically create outside processing transactions for workorders on their release if Automatic is selected at the Issue Method field and for workorders on their completion if Backflush is selected at the Issue Method field. This optionis available for all cost completion methods.

The default setting at this check box is determined by the selection at the Auto GenerateOutside Processing check box on the Work Order Options Main tab.

This check box is available only if Automatic or Backflush is selected at the IssueMethod field on the Work Order Entry Header tab.


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Work Order Entry (Operations)

Use the Operations tab to enter the operational step information necessary to manufacturethe product for the work order. Each step identifies the operation to be performed and the

work center where it will be performed.NOTE At least one step number must be entered on the Operations tab for each workorder before the Materials or Scheduling tab can be accessed.

After a work order is released using Work Order Transaction Entry, you cannot delete a

step, but you can modify the standard run type, run time (hours per lot, hours peroperation, or operations per hour), parent item type, or factor for the step in order to

change its extended time to 0 (zero). New substeps cannot be created; they are created

automatically when phantom bills or bills with options are merged from the Bill of

Materials module.

Step Number

Enter the step number representing the step or substep to add or maintain. At least one

step number must be entered for each work order. Click the Lookup button to list all step

numbers. Click the Next Number icon to accept the next automatically incremented stepnumber. If the step number represented by the next incremented value already exists, the

difference between the current step number and the step represented by the multiple will

be divided by two. If you are entering the first step number for a new routing, clicking theNext Number icon will insert step number 0000 automatically. If you issue component


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material to your work orders as soon as the work orders are released, and the component

material is required for the first step of the routing, it is recommended that you create step

number 0000 as a material issue step. Click the Save As button to save the currentversion of the routing to the Routing master file. To enter the substep number, type the

step number followed by the alphabetical prefix and the subrouting number of the

phantom or option bill (for example, 0020-A-0010).

NOTE New substeps cannot be created here; they can only be created automatically

when phantom bills or bills with options are merged from the Bill of Materials module.

Step Description

Type the step description. Click the Text button to display the Step Text Maintenance

window. If an extended step description has been entered for the step, *Ext* appears to

the right of the Text button.

Parent Item Type

Select the parent item type required to indicate whether this operation produces morethan one parent item (Parents/Operation) or whether more than one operation isrequired to produce this parent item (Operations/Parent). Select Operations if thisoperation, in conjunction with the other steps in this routing, will produce more than oneparent item. This field is available only for existing line items if Hours per Operation orOperations per Hour is selected at the Standard Run Type field.

Factor

If Operation/Parent is selected at the Parent Item Type field, accept 1, or enter the

number of times that this step must be performed to produce one parent item. IfParent/Operation is selected at the Parent Item Type field, accept 1, or enter the numberof parent items that will be produced each time this step is performed.

Work Center

Enter the work center code representing the work center where this step will beperformed. Click the Lookup button to list all work center codes.

NOTE If Routing Maint or None is selected at the Addition of Work Centers and OPCodes field in the Work Order Options window, or if you do not have security clearancefor Work Center Maintenance, you cannot establish new work centers.

Oper Code

Enter the operation code representing the work to be performed for this step at the workcenter selected. Click the Lookup button to list all operation codes for this work center.NOTE If Routing Maint or None is selected at the Addition of Work Centers and OPCodes field in the Work Order Options window, or if you do not have security clearancefor Work Center Maintenance, you cannot establish operation codes.


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Standard Run Type

Select Hours per Operation to calculate the standard run time in terms of hours peroperation. Select Fixed Time per Lot to calculate the standard run time as a fixedamount of time per lot (for example, a setup operation). Select Operations per Hour tocalculate the standard run time in terms of operations per hour.

NOTE Generally, if it takes more than one hour to complete one operation, select Hoursper Operation. If you complete more than one operation per hour, select Operations perHour. If an operation always takes a fixed amount of time, regardless of the quantitybeing produced (for example, setup activities), select Fixed Time per Lot.

Ignore Queue Time

Select the Ignore Queue Time check box to ignore any queue time assigned to thecurrent work center for this operation in Work Center Maintenance. Clear the check boxto accept the queue time assigned to the current work center for this operation. Queuetime is the amount of time that a job waits at a work center before the work is actuallybegun.

Overlap %

Enter the percentage of overlap used to determine when this step is scheduled to beginin relation with the previous step. For example, if you enter an overlap percentage of 0for step 0020, step 0020 will not begin until the previous step has been completed. If youenter an overlap percentage of 25 for step 0020, step 0020 begins when the previousstep is 75 percent co

Documents

Work Order Manual - Parkinson Accounting Systems