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Labor Item type is only for Sales.Why?

Former Member
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Dear Experts,

can you please tell me, why the Labor item type is only a sales item?

What we do where we add when the purchase item include the Labor Cost?

Where this Labor item type is used in SAP B1?

Thanks in advance

Accepted Solutions (1)

Accepted Solutions (1)

kothandaraman_nagarajan
Active Contributor
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Hi,

Where this Labor item type is used in SAP B1?


To use in the Service module to calculate the amount of time spent completing a task.

What we do where we add when the purchase item include the Labor Cost?


Create an non-inventory item (it is not necessary should be from labor item type. You can create Item type item without selecting as inventory item.) and add second line GRPO/AP invoice.


Thanks & Regards,

Nagarajan

Answers (8)

Answers (8)

kothandaraman_nagarajan
Active Contributor
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If you got answer, please close this thread by marking correct/helpful answer.

Former Member
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Thanks Nagarajan

Former Member
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Dear Rahul,

Thanks.

Former Member
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Dear Rahul,

It's OK, if we produce the item in Inhouse.

How we add that Fabricating Cost in Purchase Documents such as GRPO,A/P invoice?

Thanks in advance.

Former Member
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Hi Vignesh,

Simply create a Non Inventory Item as Fabrication and add this item into GRPO/AP Invoice as second line item and put Price as 50 so in the first line you have RM worth 100 and second line for Fabrication cost worth 50. This way the Total would be 150 if Vendor is charging Fabrication Cost within same invoice.

Regards,

Rahul

Former Member
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Dear Rahul,

In case,

We purchase one Item which is fabricated by our vendor.

In the Vendor invoice,

They mention,

Item Cost -         100

Fabricating Cost-  50

Total                - 150

Where we mention that Fabricating Cost in SAP B1?

Regards

Vignesh Ravi

Former Member
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Okay,

You have to create a Labour/Non inventory Item with Standard Valuation method and define 1.00 as cost.

When you perform a production for Fabrication where you issue RM Qty of 100 Cost and plan 50 qty of Labour item which will cost as 50 and when finally you receive Fabricated product it will have a cost of 150.

If you are using SAP 9.1 version please use Resource Master for Labour as it is more efficient than using Non Inventory Item in Production Order.

Hope this will help you.

Regards,

Rahul

Former Member
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Thanks Balaji and Rahul.

One more Question?

How can we add Labor Cost of the Purchase item in SAP?

Thanks in advance.

Former Member
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Hi,

This is little confusing to me. What do you mean by Labour cost of Purchase Item?

What do you need exactly here?

Regards,

Rahul

former_member205766
Active Contributor
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Hi

Labour Cost is the expenditure item it is not treated as stock so we create it is as non inventory item

How to use Labour items in a Production Order

To include a non-stock item in your bill of materials for a 'Production Order' please do the following.

Create a child item - 'labour' as Item Type 'Labour'.

Ensure the issue method of this item is 'Backflush'.

Costing method must be 'Standard' and a 'Cost Price' must be maintained at this stage. The reason for this is that the cost price can be updated since it is a non inventory item and so will not have any stock posting.

Choose appropriate expense account, WIP account and WIP variance account for this item.

With Regards

Balaji Sampath

Former Member
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Hi,

You can use these Labour items in Production also to record the labour cost.

But if you want to use Labour type of item in purchase docs also, you can create non inventory item.

Regards,

Rahul