It is my understanding in Acumatica Labor Overhead is not calculated unless you apply a qty to an operation. It is also my understanding that this qty triggers a “move” (but not into inventory) operation which kicks off the Labor over head calculation. Which is fine in many cases however in some case you have long run assembly time where you might be on an operation for a long period of time. The pitfall here is you will not be able to track the labor dollars effectively until you post a qty complete to an operation (even if that operation may not be complete in reality). Couldn’t this behavior just be a preference to allow the labor transaction to trigger the overhead? Even if the qty complete it posted as 0? I hope that all makes sense.
Overhead Calculations
+3Hi, that is possible if you choose the below overhead type. Overhead cost will be allocated based on labor hour or cost you have released in Labor transaction.
However, you need to ensure that the overhead cost you are trying to allocate are indeed driven by labor. In other words, labor should be the cost driver of the overhead.
We want to apply Labor By Cost. Meaning applying the cost depending on the cost of the labor applied to production order. (which is what is selected).
The issue is the over head calculation will not apply to the operation until an actual qty is posted to the operation. So if you have an operation that takes 2 weeks to complete you have no idea where you fall in regards to overhead costing on that work order/operation.
Here is an example from my test environment of what I am talking about. What we would expect is that in Cost Transaction 3 there would still be an overhead calculation but the overhead is tied to the qty even with “Labor By Cost” selected.
Hi
Curious if you came up with a solution to this. I have a client with a similar request. They would like to apply overhead based on Labor hours prior to a move transaction.
Thanks!
Luke
Hope that makes sense.
Acumatica is working on another solution for this I am not 100% where it is in the release cycle.
I think that does make sense conceptually. Does this cause the completed quantities on the labor operations to be inflated by the number of labor transactions?
Thanks,
LF
no not the way we have it set up in the Overhead WC.
Hi - Could you send a screenshot of the Overhead WC that you defined. Did you use the Control Point parameter?
I modified the Work in process report by adding a column called unmoved overhead and a formula to multiply hours reported by overhead rate minus the overhead already moved. It then sums everything up at the bottom, and Finance then uses that number to make their entry for our financial statements.
Hi, that is possible if you choose the below overhead type. Overhead cost will be allocated based on labor hour or cost you have released in Labor transaction.
However, you need to ensure that the overhead cost you are trying to allocate are indeed driven by labor. In other words, labor should be the cost driver of the overhead.
The issue with this is that they still have to Complete a QTY for the Overhead to be applied. If a Labor Transaction is logged 0 QTY complete, it doesn’t work.
I think an even bigger issue is Labor logged after the Operation has been completed (not too uncommon).
It doesn’t even consider that anymore for any kind of Overhead due to this.
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