How do you manage Fixed manufacturing costs per cycle

[Corinne Claypool]

I have a manufacturing process that costs a fixed amount per cycle rather than per unit with a max capacity per cycle (ex. labor wise it is the same to produce 10 units as 100 units up to 500 units but then you have to start a new cycle with a new round of labor costs.)

I am sure this is not a unique model as lots of things cost less to produce in volume.  How do I deal with that in ERPnext?

Thanks  Corinne

[Rushabh Mehta]

Corrine, you probably need activity based costing. You have to define a fix cost to your product (based on max capacity) and transfer the remaining cost to "unused capacity"

I am not sure how this can be done, but I am guessing you can make two heads for labour expense and unused labour expense and cost accordingly. You might have to try out a few combinations...

@rushabh_mehta

via mobile

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