Understand production costs in settlements

When a cost template contains production cost lines — lines with Work Centre No. filled and Item Charge No. blank — the settlement calculation reads the capacity ledger entries for that work centre from the production orders that consumed the settled purchase lots. Each lot's share of the production cost is determined by its quantity factor: the quantity of that lot consumed in the production order divided by the total quantity consumed in the same production order.

This topic describes how production costs appear in settlements for each accounting method.

Account Sale settlements

In an Account Sale settlement, production costs appear in a Production collapsible group at the same level as the Sales and Uncategorized groups. Which section the group appears in depends on the Deduction Method set on the production cost template line:

• Net Revenue: the Production group appears in the Costs (Deducted Revenue) section.
• Account Sale Amount: the Production group appears in the Costs section.

A cost template can contain production cost lines with both deduction methods, in which case a Production group appears in both sections — each showing only the lines that use that section's deduction method. A group is only visible when the cost template contains at least one production cost line for that deduction method.

Each row in a Production group represents one production cost template line. The row label is the trade plan description when a trade plan code is set on the line, or the work centre name when no trade plan is set. The amount per grower column is calculated as follows:

Production cost amount = Capacity Ledger Entry direct cost × Quantity Factor

The Quantity Factor for a grower column is: quantity of that lot consumed in the production order ÷ total quantity consumed in the same production order.

To view the source detail for a production cost amount, select the amount to open the Account Sale Detail Lines page. The page shows one row per contributing production order.

Field	Description
Source Document Type	Specifies whether the production order is a Released Production Order or a Finished Production Order.
Source Document No.	Specifies the production order number. Select Show Document to navigate to the production order.
Source Type	Specifies the source type for the cost. For production costs, this is Work Center.
Source No.	Specifies the work centre code.
Source Name	Specifies the work centre name.
Item Ledger Entry Type	Specifies Output for production costs.
Factor	Specifies the quantity factor applied to this production order's cost for this grower column.
Cost Amount (direct)	Specifies the direct cost amount after applying the factor.

Pooling settlements

In a Pooling settlement, production costs appear in a Production expand tab under each purchase order row on the Pooling page, alongside the existing Sales tab. As with Account Sale, the Deduction Method on the production cost template line determines where the tab appears:

• Net Revenue: the Production tab appears under the Costs (Deducted Revenue) field.
• Account Sale Amount: the Production tab appears under the Costs field.

A tab is only visible when the cost template contains at least one production cost line for that deduction method.

Each row in a Production tab represents one production cost template line. The cost per row is calculated using the lot's quantity factor.

In a Pooling settlement, Pool Share (the lot's proportional contribution to the total pool quantity) and Quantity Factor (the lot's proportional consumption in the production order) are calculated independently and may differ. Production costs are distributed by quantity factor, not by pool share.

The Work Centre column on the Pooling Costs page identifies production cost lines. For production lines, Work Centre is filled and Item Charge No. is blank.

Consignment calculations

In a Consignment calculation, production costs from production cost template lines are included using a Consumption Factor: the quantity of that lot consumed in the production order divided by the total quantity consumed in the same production order.

The Consignment Costs page shows a Work Centre column alongside the existing Item Charge No. column. For production cost lines, Work Centre is filled and Item Charge No. is blank.

To view the source detail for a production cost amount, select the amount to open the Consignment Details page. The page shows one row per output batch, with the Source Document Type set to Released Production Order or Finished Production Order.

For production cost lines, the Cost Amount (Expected) on the Consignment Costs page is always 0 because production costs are sourced exclusively from actual capacity ledger entries. The Cost Amount (Consignment) reflects the actual amount based on the Cost Application Method on the cost template line.

For setup information, see Set up cost calculation templates.