Example of How Microsoft Dynamics AX Calculates

Indirect Costs Using a Costing Sheet in Bill of

Materials and Production in Microsoft Dynamics AX 2009 - North
America
Last Modified 1/31/2011
Posted 3/4/2010

This is an example of how Microsoft Dynamics AX Calculates Indirect Costs Using a Costing Sheet in Microsoft Dynamics AX 2009
This document includes steps users can use to help understand how the Costing Sheet works.
1.

Log into the Contoso Database or demo data for Microsoft Dynamics AX 2009.

2.

Create a new Indirect Cost group called Lab_OH with a Name of Labor Overhead.
Go to Inventory Management, choose Setup, choose Bills of materials, choose Cost groups.
Create a new cost group called Lab_OH
Enter Labor Overhead in the Name field
Choose Indirect in the Cost group type field
Save the new Cost group

3.

Go to the Costing Sheet

Go to Inventory Management, choose Bills of Materials, choose Costing sheet setup

4.

Create a new Total Node Called Overheads

Go to Inventory management, choose setup, choose Costing sheet setup
Right-click the COGM node and then click Create
Select Total in the Node Type field and click OK
With the new Total node selected, on the Edit tab, mark the Header and Total checkboxes in the Setup field group

5.

Create a new Cost group node

Right click the Total Node you just created and choose Create
Choose Cost Group in the Select node type field.
Call the new Cost Group Labor Overhead
Assign the Labor Overhead Cost group you created in step 2 to this node
On the Edit tab in the Setup field group, choose the Lab_OH Cost group

6.

Create a Surcharge Node

Under the Costing group Node created in step 5, create a new Surcharge Node
Right-click on Labor Overhead and choose Create
Choose Surcharge in the Select node type field
On the General tab, choose Total in the Subtype field
On the Calculation Tab choose Manufacturing in the Code field
Under the Surcharge section at the bottom of the form, choose a Version in the Version field, choose a Site in the Site
field and enter 50.00 in the Percent field
Save the Surcharge
Click on the Activate button to Activate the Surcharge
Under Posting Configure the WIP and costing accounts
Save the Costing sheet by choosing the Save button

7.

Create a new production order for the Item 1171

Create an order for 1 unit

Estimate the order

Go to Inquiries, choose Price Calculation, then select Costing Sheet
Please note when you go to Overhead, then choose Labor overhead that the value is 50% of the Manufacturing cost, in this case
for a production for 1 unit, this cost is going to be 3.33
8.

Delete the Surcharge node and create a Rate node instead.

Highlight the Surcharge node and choose the delete icon.
Right-click on the Labor Overhead node and choose Create
Choose Rate in the Select node type field
Choose OK
On the General tab, choose Process in the Subtype field
On the Calculation tab, choose Manufacturing in the Code field
On the Posting tab, choose the WIP and Indirect posting accounts
In the Rate section at the bottom of the form
Choose a version in the Version field
Choose a Site in the Site field
Enter 50.00 in the Amount field
Save the node
Choose the Activate button
Save the Costing Sheet

9.

Create a new production order for the Item 1171

Estimate the production order
Go to Go to Inquiries, then choose Price Calculation
Please note that the calculated overhead is $50*Process time for each operation with a cost category related to the
Manufacturing Node. In this case it calculates out to be 19.64

10.

Change the subtype of the Rate node to Quantity for 1 unit

On the General tab, choose Quantity in the Subtype field
Save the Costing Sheet

11.

Create a new production order for the Item 1171

Estimate the production order for the Item 1171
Go to Inquiries, then choose Price Calculation
Note that the calculated Labor Overhead is $50*Quantity produced in each operation. In this case is going to be 100

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