Understanding labor classes and cost calculations in SavantPDM
Labor Classes define how direct labor (DL) and manufacturing overhead (MOH) costs are calculated for a part. Each routing operation references a labor class with an associated hourly rate and overhead percentage. The system multiplies the labor rate by the part's Part Hours to calculate direct labor cost, then applies the MOH percentage to determine overhead cost.
Default Behavior: If a part number has no routing operations defined, the system automatically uses the DEFAULT labor class to perform these calculations, ensuring labor and overhead costs are still included in part and BOM cost rollups.
Below is an example of labor classes that might be configured in SavantPDM:
| Labor Class | Description | Labor Rate ($/hr) | MOH (% / 100) |
|---|---|---|---|
| DEFAULT | Default labor rate | 30.00 | 0.20 |
| ASSEMBLY | Mechanical or electrical assembly of parts | 25.00 | 0.20 |
| MACHINING | CNC or manual machining operations | 40.00 | 0.20 |
| FABRICATION | Sheet metal cutting, bending, stamping | 35.00 | 0.20 |
| WELDING | MIG, TIG, spot welding, brazing | 38.00 | 0.20 |
| FINISHING | Painting, powder coating, polishing, deburring | 30.00 | 0.20 |
| INSPECTION | Dimensional checks, QA testing | 28.00 | 0.20 |
| SETUP | Machine setup, programming, fixture setup | 45.00 | 0.20 |
Direct Labor cost is calculated by multiplying the labor rate by the part hours:
Where:
If a part uses the MACHINING labor class ($40.00/hr) and requires 2.5 Part Hours:
Manufacturing Overhead is calculated as a percentage of the Direct Labor cost:
Where:
If the DL Cost is $100.00 and the MOH Rate is 0.20 (20%):
The total labor-related cost for this part would be:
If no routing operations are assigned to a part:
Tip: Even without specific routing operations, setting Part Hours on a part ensures that labor costs are included in cost rollups using the DEFAULT labor class rates.
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