Cost Object

A cost object is one thing that costs money: a particular machine, a labour rate, an overhead. It says what kind of cost it is, whether that cost is fixed or varies with output, and which account it is posted to. It belongs to the manufacturing side of the shared product.

Where

Organization & Setup › Cost Object › Cost Object

Who uses it

The implementation consultant, on a manufacturing implementation only

When

Before Cost Object Group

Needs first

The account it posts to

What it is for

Manufacturing costing needs to name the things that cost money before it can total them. A loom, an hour of a weaver's time, the factory's electricity - each one is a cost object.

Three things are said about each: what kind of cost it is, whether it is fixed or variable, and where it posts. Once it exists, it is gathered into a Cost Object Group and used by the Resource and Resource Group screens of the manufacturing product.

An HR-only installation does not need this screen.

Every field, in plain words

Field	What it means	What to put in it	Notes
Cost Object	The short code.	LOOM-01	Required.
Name	What the cost object is.	Airjet Loom 1	Required.
Cost Key	What kind of cost it is.	Machine	Required. Four values, listed below. These come from a fixed list on this screen, not from the Cost Key screen.
Cost Category	Whether the cost changes with output.	Fixed	Two values: Fixed - the cost is the same whatever is produced, for example a machine's depreciation. Variable - the cost moves with output, for example power consumed per hour of running.
Cost Account	The account the cost posts to.	Pick it from the list of accounts

The Cost Key values:

• Machine - the cost of running a piece of equipment. Pick it for a loom, a boiler, a generator.
• Labour - the cost of people's time. Pick it for a labour rate per hour.
• OverHead - a cost that cannot be traced to one machine or one person, such as factory electricity or rent.
• Item - the cost of a material consumed.

How to configure it

1. Open Cost Object and enter the code and name, for example LOOM-01 and Airjet Loom 1.
2. Pick the Cost Key - Machine for equipment, Labour for a labour rate, OverHead for an untraceable cost, Item for a material.
3. Pick the Cost Category, Fixed or Variable.
4. Pick the Cost Account the cost posts to.
5. Save, then gather the related objects into a Cost Object Group.
6. Skip the screen entirely on an HR-only implementation.

Scenarios

A machine's depreciation is fixed but its power is not

Two cost objects. One with Cost Key Machine and Cost Category Fixed for the depreciation, one with Cost Key OverHead and Cost Category Variable for the power. Group them together on a Cost Object Group so they are costed as one machine.

A cost object has to be deleted

It can be, until something refers to it. Once it is named on a resource group the deletion is refused, because the cost history would stop making sense. Rename it instead, or stop using it.

What it is connected to

• Cost Object Group gathers cost objects together with a cost each.
• The Resource and Resource Group screens of the manufacturing product read cost objects.
• Organizational Structure has a setting that makes a cost object compulsory on every document line.

If something looks wrong

• "It will not let me delete a cost object, it says it is already referred in a resource group" - something is using it. Remove it from the resource group first, or leave it in place and stop using it.
• "The cost key list only shows four options" - that is correct. The four are built into this screen and the Cost Key screen is a separate list that this field does not read.