Learn how to calculate Manufacturing Process Costing for Products in Odoo ?

September 27, 2023 by
Nihar Raval

Process costing for Manufacturing order and work order odoo apps helps to manage machine costing, labour costing, material costing and overhead costing calculation on Bill of materials, Production order and work order for manufacturing application. This Odoo apps is very useful for those company who using MRO for manufacturers industry management with Odoo. With use of this application you can define labour cost/hour and overhead cost/hour from the work center and once bill of material -BOM will be created for finished goods selected components will helps to calculates planned material cost and based on selected routing on BOM, planned labour cost and overhead cost will be calculated. Once Manufacturing order is process based on actual finished goods and actual time  actual costing of labour ,overhead will be calculated.

Feature


1) Material Costing, Labour Costing and Overhead Costing for Production.

      User can add direct material cost, direct labour cost and direct overhead cost in Bill of material as well as on Production order.

2) Total Process Costing for Bill of Material and Manufacturing.

      Display total costing for direct material cost, direct labour cost and direct overhead cost in Bill of material as well as on Production order.

2) Automated and Manual Costing Method.

      Supported two different costing method, Manually costing method allow to add labour and overhead costing manually on BOM and Manufacturing order. Automated Costing works based on work-center and production user/manager can defined labour cost/hour and overhead cost/hour under work center and costing will be done according to that with real time consuming hours.

4) Automatically Pass or Calculate Material, Labour and Overhead.

      When user try manually costing method then direct material cost, direct labour cost and direct overhead cost automatically passed from the BOM to Manufacturing Order. When user select Workcenter Process costing method, costing will be calculated real-time, material costing calculated based on consumed material with product cost, labour costing calculated with assign work center's labour cost/hour consumed time and overhead costing calculated with assign work center overhead cost/hour consumed time.

5) Print Costing Reports.

      User can able to Print Process costing With BOM Report And Process costing With MO Report.

6) Supported Both edition.

      This Apps supported Odoo Enterprise and Odoo Community Both Edition.

Bill of Materials - Direct Material Cost

Here you can see that direct material cost automatically added based on components of the Bill Of Material in Odoo.

If you want to add direct material cost manually then you can also add in Odoo.



Bill of Materials - Direct Labour Cost

You can configure Direct Labour Cost on Bill of Materials in Odoo.

Bill of Materials - Direct Overhead Cost

You can configure Direct Overhead Cost on Bill of Materials in Odoo.

Bill of Materials Costing

Here you can see total cost of Material,Labour and Overhead.

Create Manufacturing Orders From Odoo

When you create manufacturing orders from BOM then selected BOM's Direct Labour Cost and Direct Overhead Cost will be filled automatically on manufacturing order in Odoo.

Direct Material Cost will be filled automatically based on Consumed Materials of manufacturing order.

If you want to add direct material cost manually then you can also add in Odoo.

Create Manufacturing Work order From Odoo

By clicking on Create Work orders button in Odoo, Work order will be created with Direct Material Cost, Direct Labour Cost and Direct Overhead Cost.

Workorder Form View



Manufacturing Actual Costing 

User can see actual quantity of direct material cost.


Users can also print Bill of Materials report with all costing methods.


Manufacturing Orders Report in Odoo




Manufacturing Process Costing with Accounting/Journal Entry Odoo Apps

Process Costing in Manufacturing With Journal Entry Odoo apps is use to calculate process costing of manufacturing and it's workorder process along with with accounting, Which define labour cost and overhead cost from work center. This odoo apps helps to calculate Material Cost, Labour Cost, Overheads Cost for manufacturing and production orders when MO and workorder finished. Its calculates estimated costing and real costing both , estimated costing calculated on Bill of Material-BOM and real costing calculated on Manufacturing Order based on real-time consumption and actual quantity consumption on production order, So production manager can see difference of estimated costing and real costing to improve the productivity. Also Odoo app generate accounting journal entry for calculated manufacturing process costing for material cost, labour cost, overhead cost to manufacturing order.When journal entry will created for manufacturing order it will include all the process costing calculation for material, labour and overhead costing on journal entry .You can also see the process costing calculation on Manufacturing order reports.

Feature


1) Add Material, Labour and Overhead Cost.

      Customer can add direct material, labour and overhead cost in BOM and MO.

2) Generate Accounting Entry.

      Stock journal entry will generated for finish product based on actual cost of MO.

Product Category Configurations

User have to set product's inventory valuation as "Automated" and select "Account Stock Properties" journal entry will created based on this.

Bill of Materials

Create bill of materials in Odoo.

Manufacturing Order

User have to create manufacturing order and add "Direct Material Cost", "Direct Labour Cost", "Manufacturing Overhead Cost" in Odoo.


User can see "Total Actual Material Cost" and "Total Actual Cost" of manufacturing order under "Costing" tab in Odoo.


Journal Entry in Odoo

User can see created stock journal entry for done manufacturing order.

 

And If you have multiple Manufacturing Units with Branches, To manage them you can always use our Odoo App

Multiple branch/unit(operation) management.

Nihar Raval September 27, 2023
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