Create Should Cost Calculation

To start a calculation you must create a Should Cost Calculation for your product and define the properties that present the framework conditions for a precise cost calculation.

1. Create a should cost calculation with company-own data and name "Motor Shaft".Create Should Cost Calculation

   1. Click on Manage in the ribbon.

   2. Select the Should Cost Calculation.

      The created calculation opens in a new tab.

      You are the owner of the calculation that was created.

   3. For the should cost calculation enter the name "Motor Shaft" in the Structure view.

   4. Define the following properties for the should cost calculation in the Details view > Assumptions view scheme (combobox):

      Production Quantity	100,000.00 pc / a
      Data Origin	Own Company
      Business Unit,	Business Unit 1
      Purpose	Benchmarking
      Reference Company
      Industrial sectors	Manufacture of Rubber and Plastic Products
      Production Location	World > Europe > Germany > Brandenburg
      Target Profit Rates
      Target Profit Rate on Raw Material:	20 %
      Target Profit Rate on Purchased Parts	20 %
      Target Profit Rate on Manufacturing:	20 %
      * Values are determined for the following properties using value rules based on your inputs under reference companies:
      Material Overhead Rate Manufacturing Overhead Rate Administration Overhead Rate Sales Overhead Rate Development Overhead Rate	Imputed Interest Rate Electricity Cost Rate Floorspace Cost Rate Water Cost Rate Gas Cost Rate Compressed Air Cost Rate

2. In the Details view > Assumptions view scheme (combobox), select the Estimate Costs valuation.

   You can directly enter cost values. For a more detailed cost estimation you can activate the "Estimate Details " checkbox.

3. Enter the following estimation costs in the Details view:

   Valuation	Estimate Costs
   Estimate Details
   Raw Material	0.20 EUR / pc
   Machine Cost	0.70 EUR / pc
   Labor Cost	2.40 EUR / pc
   Allocation of Investment Costs for Tools	0.10 EUR / pc
   Allocation of Investment Costs for Fixtures	0.10 EUR / pc
   Miscellaneous Special Direct Manufacturing Cost	0.90 EUR / pc

FACTON calculates the production costs according to the entered estimation costs. The determined overhead costs provide the estimated imputed sales price.

Next step: Insert Part