SyteLine Production Costing Configuration Guide
Production costing in SyteLine tracks the true cost of manufacturing by capturing material, labor, machine, and overhead costs against production orders. Correct costing configuration ensures accurate standard costs for pricing decisions, meaningful variance analysis for continuous improvement, and proper WIP accounting for financial reporting. This guide covers the complete production costing setup from cost element definition through variance analysis.
Cost Element Structure and Standard Cost Setup
SyteLine uses a multi-element costing structure defined in the Cost Types form (Menu Path: Financials > General Ledger > Cost Types). Standard production costs consist of five elements: material cost (raw materials and purchased components), labor cost (direct labor hours times work center labor rates), machine cost (machine hours times work center machine rates), fixed overhead (allocated per unit or per lot), and variable overhead (proportional to labor or machine hours). Configure cost elements in the Item Cost form, which stores values in the itemcost table with separate columns for each element. The Cost Rollup utility (Menu Path: Production > Costing > Cost Rollup) calculates standard costs by exploding BOMs and routings: material costs come from component item costs, labor and machine costs from routing operation times multiplied by work center rates, and overhead from the overhead calculation rules configured in the Overhead Codes form. Run cost rollups in simulation mode first to review proposed changes in the Cost Rollup Analysis report before committing to update standard costs.
- Five cost elements: material, labor, machine, fixed overhead, and variable overhead per item
- Configure cost elements in the Item Cost form stored in the itemcost table with per-element columns
- Cost Rollup utility explodes BOMs and routings to calculate standards from components and operations
- Run cost rollups in simulation mode first and review the Cost Rollup Analysis report before committing
WIP Accounting and Cost Flow Configuration
Work-in-Process accounting in SyteLine tracks costs as they flow through production. Material issued to a job debits the WIP material account and credits raw material inventory. Labor and machine time reported against job operations debit WIP labor/machine accounts and credit the production overhead absorbed accounts. When finished goods are received from a job, WIP is relieved and finished goods inventory is debited at standard cost. Configure WIP GL accounts in the GL Posting Codes form (Menu Path: Financials > General Ledger > GL Posting Codes) under the Production category. Each posting code maps a transaction type (material issue, labor posting, job receipt) to specific GL accounts. For multi-site environments, configure site-specific posting codes to maintain separate WIP accounts per facility. The WIP Reconciliation report compares the WIP GL balance against the sum of open job costs in the job cost tables—run this monthly to identify and resolve discrepancies before they compound.
- Material issues debit WIP Material and credit Raw Material Inventory GL accounts
- Labor and machine postings debit WIP Labor/Machine and credit Production Overhead Absorbed
- Job receipts relieve WIP and debit Finished Goods Inventory at standard cost per cost element
- Run WIP Reconciliation report monthly to identify discrepancies between GL balances and job costs
Variance Analysis and Cost Management
SyteLine calculates production variances when actual costs differ from standards, providing visibility into manufacturing efficiency. Material usage variance arises when actual quantities consumed differ from BOM standard quantities. Material price variance occurs when actual purchase prices differ from standard material costs. Labor and machine efficiency variances track actual hours versus routing standard hours. Rate variances capture differences between actual labor rates and standard rates. Configure variance GL accounts in the GL Posting Codes form under the Variance category. Variances are posted when jobs are closed through the Job Close utility, which compares total actual costs (from jobtrans postings) against total standard costs (from BOM and routing standards). The Job Variance Analysis report (Production > Costing > Job Variance Analysis) breaks down variances by element and operation, identifying exactly where and why costs deviated. Implement a monthly variance review process where production management reviews the top variance jobs and takes corrective action—update BOM quantities, adjust routing times, or negotiate material pricing.
- Material usage variance: actual quantity consumed versus BOM standard quantity per component
- Labor and machine efficiency variance: actual hours posted versus routing standard hours per operation
- Variances post on job close through the Job Close utility comparing actual vs standard costs
- Use Job Variance Analysis report to break down variances by cost element and operation for root cause
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