Work in Progress (WIP) is used to match cost with revenue. This blog discusses different methods of costing WIP and provides instructions for running the WIP process in Microsoft Dynamics Business Central or Dynamics NAV.
In Microsoft Dynamics NAV or Business Central, you can use work type codes to control your job costs and prices. On the Resources card, you can have a general rate for the resource, but for the work type, you can control the rate based on a state they work in or the type of work they do or other variation.
A topic that is discussed on all manufacturing implementations is Work Centers vs. Machine Centers. Questions like ‘should we be using machine centers?’ and ‘what are the differences?’ are always raised and discussed. It is very important to understand the differences and how to apply the functionality in Microsoft Dynamics NAV.
It is quite common in processing industries, like chemical production, that the cost of Labor is not the primary cost of production. In chemical processing, the cost of energy or depreciation may be the largest cost component.
While Centers and Routings in Dynamics NAV are typically thought of in terms of Direct Cost (Labor) and Overhead, we can set up Work Centers and Routings to accommodate other cost components.