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Defined the Cost Component classes in the ERP system

I have defined the Cost Component classes in the system, please find attached the file for your reference. Please proceed with creating the Resources.

1. If the Head of Manufacturing agrees, one packing labor for all packing related operations will be OK.

2. As you know, the previous data masters have two labor resources i.e Direct Labor and Direct labor NT. Now, Direct Labor will get splitted into Opearational Labors but Direct Labor NT will remain existing as usual and will be captured in GL as Total but not operation-wise.

3. Total Overstay labor related expenses will be captured in General Ledger - GL under the Natural Account "Overstay Expenses" that Finance have to create under the COA- Chart of Accounts. If the management wants to know Average Hourly rates of Overstay expenses then Manufacturing will have to create a labor resource as OVERSTAY in their Data Masters to capture Hours. Unfortunately, it will not show Operation/Cost Center-wise Overtime rates but an average of all cost centers.

4. Finally, the more complexity in the system, the less is the chance to arrive representative costs of products.

I have included all the newly created labor resources in the attached OPM general data master. I have also included the overstay labor in the resource list and mentioned the cost component class as “OT labor” as we discussed. Please ask KPMG consultants to define the cost component class in the system.

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