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Cost groups

Overview

In Dynamics 365, cost groups are used to group similar costs together for the purpose of calculating the cost of production. Cost groups can be used to group direct costs, such as raw materials and labour, as well as indirect costs, such as overhead and machine costs.

You must create at least one cost group to use for indirect costs.

In the example below, cost groups have been setup as follows:

  • Labour – e.g. L1, L2 etc. These have a cost group type of Direct manufacturing and have been separated by production department (e.g. Packaging, Assembly). When a cost group is of type Direct manufacturing it can be assigned to cost categories which in turn are assigned to route operations.
  • Material – e.g. M1, M2 etc. These have a cost group type of Direct material and have been separated by material type (e.g. Cabinet components, Electronic components). When a cost group is of type Direct material it can be assigned to released products.
  • Indirect – OVH1, OVH2 etc. These have a cost group type of Indirect and have been separated by type of overhead (e.g. transport overhead, material overhead, labour overhead). When a cost group is of type Indirect it can be assigned to indirect costs for surcharges (represents a percentage of a value) or rates (represents an amount).
  • Subcontracting – these have a cost group type of Direct outsourcing; these cost groups can be assigned to products of type service.

Learning with Microsoft

Further information related to cost groups can be found on Microsoft Learn within the Work with the costing sheet in Dynamics 365 Supply Chain Management learning path via the URL below.

Cost groups – Training | Microsoft Learn