# D365 Standard Cost Rollup Calculator for Manufactured Items

> Source: https://netray.co/tools/d365-standard-cost-rollup-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Check a standard cost for one manufactured item, from material and scrap through setup, run time and overhead, and see how lot size moves it.

## Category

microsoft-dynamics

## Erp

Microsoft Dynamics 365 Finance and Supply Chain Management

## Industry

Discrete Manufacturing

## Audience

- Cost accountant
- D365 manufacturing consultant
- Controller

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Material cost per good unit before scrap

**Key:** mat

**Type:** number

**Default:** 18.5

**Min:** 0

**Step:** 0.1

**Unit:** $

#### Scrap percentage

**Key:** scrap

**Type:** slider

**Default:** 3

**Min:** 0

**Max:** 30

**Step:** 0.5

**Unit:** %

**Help:** Production scrap or BOM line scrap, expressed as a share of gross input.

#### Setup time per run

**Key:** setup_h

**Type:** number

**Default:** 1.5

**Min:** 0

**Step:** 0.25

**Unit:** hours

#### Run time per unit

**Key:** run_min

**Type:** number

**Default:** 4.2

**Min:** 0

**Step:** 0.1

**Unit:** min

#### Standard lot size

**Key:** lot

**Type:** number

**Default:** 100

**Min:** 1

**Step:** 10

**Unit:** units

#### Labor and machine rate

**Key:** rate

**Type:** number

**Default:** 64

**Min:** 0

**Step:** 1

**Unit:** $/hour

**Help:** The cost category rate applied to routing time.

#### Overhead on routing cost

**Key:** oh_pct

**Type:** number

**Default:** 35

**Min:** 0

**Step:** 1

**Unit:** %

**Outputs:**

#### Material with scrap

**Key:** mat_s

**Expr:** mat / (1 - scrap / 100)

**Format:** currency

**Description:** Gross material needed so that one good unit remains after scrap.

#### Setup cost per unit

**Key:** setup_u

**Expr:** setup_h * rate / lot

**Format:** currency

#### Run cost per unit

**Key:** run_u

**Expr:** run_min / 60 * rate

**Format:** currency

#### Overhead per unit

**Key:** oh_u

**Expr:** (setup_u + run_u) * oh_pct / 100

**Format:** currency

#### Standard cost per unit

**Key:** std

**Expr:** mat_s + setup_u + run_u + oh_u

**Format:** currency

**Primary:** true

#### Cost of one standard lot

**Key:** lot_cost

**Expr:** std * lot

**Format:** currency

**Primary:** true

**Chart:**

#### Standard cost vs lot size

**Type:** line

**X:** lot

**From:** 1

**To:** 300

**Steps:** 30

**Series:**

- std

**Disclaimer:** A simplified single-level model for checking numbers. D365 costing versions, multilevel BOM rollups, cost groups and indirect cost formulas can differ.

## Content

**Intro:** Use this to sanity-check the standard cost D365 produces for a manufactured item, or to see what happens when scrap, lot size or labor rate changes. It separates material, setup, run and overhead so each driver is visible.

**Sections:**

#### How to use it

**Body:** Enter the net material cost for one good unit, the scrap rate, the routing setup and run times, the lot size used for costing, the resource rate and an overhead percentage. The result shows per-unit cost by component and a cost for a full lot. Compare the output with the cost shown after a BOM calculation in a costing version, and investigate any gap bigger than rounding.

#### The formulas

**Body:** Scrap is applied by dividing by one minus the scrap rate, not by multiplying by one plus the rate, because scrap is a share of gross input. Setup is spread across the lot, so a larger lot lowers cost per unit. Run cost is minutes divided by sixty times the rate. Overhead here is a percentage of routing cost, similar to a percentage-based indirect cost formula.

**Bullets:**

- Material = net / (1 - scrap)
- Setup per unit = setup hours x rate / lot
- Run per unit = minutes / 60 x rate
- Overhead = routing cost x overhead %

#### Reading the lot size chart

**Body:** The curve drops quickly then flattens: setup cost is a fixed amount spread over more units. This is why costing quantity matters. If your standard lot is far from the lot actually produced, price variances show up as production variances. Pick a costing lot size that reflects typical order quantities, and revisit it when planning rules change.

#### Common mistakes

**Body:** Applying scrap twice, once on the BOM line and again in a production-level scrap percentage, is common. So is using machine rates that already include overhead and then adding an overhead percentage on top. Document which cost categories carry which rates before comparing numbers, and make sure unit of measure conversions in the BOM match those in the item master.

**Cta:** If you maintain thousands of BOMs and want cost anomalies flagged automatically from your D365 data, Netray can set up read-only analysis with your consultant.

**Faq:**

#### Does this match D365 exactly?

**Answer:** It matches the arithmetic for a single level with a percentage overhead. D365 can also roll up multiple levels, apply different cost groups and use quantity-based indirect cost formulas, so treat this as a cross-check rather than a replica.

#### Why divide by one minus scrap?

**Answer:** Because scrap percentage is defined against gross input. To get one good unit when 3 percent of input is lost, you need input divided by 0.97, which is slightly more than input times 1.03.

#### What lot size should I use?

**Answer:** Use the quantity that best represents a typical production order. If orders vary widely, choose the median, and review the cost chart to see how sensitive the result is to that choice.

#### Where does overhead come from in D365?

**Answer:** Overhead usually comes from indirect cost formulas on the routing or BOM, or is built into resource rates. Check how your company configured them so you do not apply it twice.

## Search terms

d365 standard cost calculation, d365 bom calculation cost rollup, dynamics 365 manufacturing cost estimate, d365 costing version standard cost, d365 f&o item cost with scrap, d365 setup time lot size cost, standard cost rollup calculator

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