Cost Centres

Overview 

The Cost Centre module is used to calculate Hourly Rates for Estimating. Both direct and overhead costs can be linked to a cost centre to determine an hourly rate for services. Overhead Costs are allocated to Production Cost Centres in proportion to the Monthly Costs of the Cost Centres. You may override the Overhead Allocation. Overheads can also be recovered by marking up the rates sufficiently to cover the overheads and make a profit. 

Cost Centres are also used in the Production Planning and Tracking modules and these Cost Centres are often created only as Workstations.

Navigation: Main Menu > Setup > Cost Centres

Edit View: Header Fields 

Following is a description of the header fields used in the Cost Centre module.

• Description: Describes the cost centre.

• Code: A brief description that is used where space is limited.

• Type: The type of cost centre.

• Production: Checkbox. Checked if the cost centre is used in production.

  • Hours/Week: The productive hours which should be approximately 80% of the actual hours. When multiple workstations are included in a Cost Centre, the hours must be the combined hours of all the Workstations.

  • Weeks/Annum: The number of working weeks in a year. Allow for annual shutdown and public holidays which can be up to five weeks per annum which leaves 47 productive weeks.

• Overheads:

  • %: The percentage of overheads attributed to the cost centre.

  • Amount: The total overheads.

  • Fix: A checkbox. If checked, the overheads are fixed and not updated.

• Monthly Cost: Calculated from Direct Costs and Overheads.

• Hourly Cost: Calculated from Monthly Cost and Productivity (Hours/Week & Weeks / Annum).

• Adjustment: Can be used to adjust the Hourly Rate (e.g. add a mark-up amount).

• Hourly Rate: The calculated hourly rate which is used for Estimating.

• Fix: When checked, you can manually set the Hourly Rate.

Costs 

Costs can be added manually or using the Cost Wizard.

Wizard 

• Equipment: Add the Market Value of the equipment and a Market-related Term and Interest Rate assuming you were leasing the equipment to generate a virtual Monthly Cost for the equipment, even if it has already been paid for (i.e. includes the replacement cost).

• Operators: Add an average wage for Operators and Assistants assuming you were fully staffed.

• Maintenance: Add a projected maintenance cost and click the Finish (button) to complete the process.

Fields 

• Description: The description of the cost.

• Type: A dropdown list to select Equipment, Maintenance, Labour, or Other. The type is used to separate and summarise Costs in the Cost Centre list view.

• Weekly/Monthly/Annual: Allows costs to be captured for different periods. These are not calculation fields; all the entered costs are added and become the Direct Costs.

• Total/month: All the costs converted to a monthly total.

• Updated by: The user who last updated the cost centre. Displayed just above the footer. The fields are blank if the records have not been updated since they were created. 

• Updated: The date and time on which the cost centre was last updated. Displayed just above the footer. The fields are blank if the records have not been updated since they were created. 

Recovery Summary 

Navigation: Main Menu > Setup > Cost Centres > Double-click a Cost Centre > Menu (button) > Show Recovery
 

Displays a summary of the actual productivity and usage which can be used to update the costs. See examples below: