When you assign a weight factor to an activity code, you are identifying to the system how long performing the task takes in relation to other activities assigned to the same G/L pool. You assign ABC weight factors to your activity codes on the ABC Code Maintenance screen.
When the system calculates the costs, it assigns twice the cost to activities with a weight factor of 2, three times the cost to activities with a weight factor of 3, and so on. Assign a weight factor of 0 (zero) if you do not want the system to calculate any costs associated with this activity.
Within the Order Processing G/L pool, assume that you have only the following activities:
Order Entry
Order Entry - Bid
Order Entry - Direct
Order Entry - Remote
Sales Order Change (Customer)
Sales Order Change Bid (Internal)
Sales Order Change Direct (Customer)
You estimate that the Sales Order Change activities require an average of 5 minutes to process. Because Sales Order Change activities take the least amount of time to process, they receive a weight factor of 1. Order Entry activities take twice as long to perform as Sales Order Change activities, so they receive a weight factor of 2. Internal costs are given a weight factor of 0 (zero).
When you enter the information on the ABC Code Maintenance screen, assign the weight factors as shown in the table below:
|
Description |
Wght |
|
Order Entry |
2 |
|
Order Entry - Bid |
2 |
|
Order Entry - Direct |
2 |
|
Order Entry - Remote |
2 |
|
Sales Order Change (Customer) |
1 |
|
Sales Order Change Bid (Internal) |
0 |
|
Sales Order Change Direct (Customer) |
1 |
When the system calculates the activity costs for the Order Processing G/L pool, it assigns twice the cost to the activity with a weight factor of 2 that it does to the activity with a weight factor of 1. If you added another activity to this pool that took 15 minutes to process, you would assign a weight factor of 3, and so on.
Weight factor values can vary from pool to pool. For example, if the activity that requires the least amount of time in a different G/L pool takes 20 minutes to process, it still receives a weight factor of 1. The next weight factor change, up to 2, would occur at 40 minutes in this case. If you have activities that fall between the two, you would round up to 2 from 30 minutes, or round down to 1 from 29 minutes.
Alternatively, if you want a greater degree of accuracy, you could figuratively assign the lowest weight factor (1) at 10 minutes, which would give the activity that takes 20 minutes to process a weight factor of 2, and the activity that takes 40 minutes a weight factor of 4. Then, if you have activities that fall at 30 minutes, you could assign those activities a weight factor of 3.
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