Updated July 8, 2024
By default the system uses a Cost Plus method of arriving at an intended Sell Price for an estimate or order. The Cost is derived from Production, Materials and Stock items.
Production is based on time multiplied by an hourly rate. In the system, hourly rates are referred to as the All Inclusive Rate (i.e. AI Rate), or sometimes referred to as Budgeted Hourly Rate. The AI Rate is the fully burdened or budgeted hourly rate for a manufacturing process. This rate is intended to include all elements of cost, both direct and overhead, including depreciation, utilities, labor and benefits.
It is important to note that the Sell Price (the end price to the customers) is calculated by applying a Markup(s) to Production, Materials and Stock items.
In order to gain the maximum benefit of the Job Costing and Data Collection modules the user should have accurate Budgeted Hourly Rates. The system does not provide methods or procedures to determine those rates. However, there are 3rd party applications that will assist in developing Budgeted Hourly Rates.