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Rollup cost calculation for Fixed Labor vs Variable Labor

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Summary:

We'd like to understand the difference in Cost Rollup formula for Fixed Labor vs Variable Labor

Content (please ensure you mask any confidential information):

For example: on Work Definition for Item A: (Production Lot size quantity is 50 EA on PIM. See screenshot)

Operation 1: Fixed Labor is 4 Hours    

Operation 2: Variable Labor is 2 hours

The labor rate is $30 for both operations.

As per our test: the calculated roll up labor cost in standard cost for Item A is (4hrs X 30 + 2hrs X30 =$180)

Our expectation is ((4hrs/50EA X 30 + 2hrs X30 =$84). The Fixed labor hours should be divided by Production Lot Size quantity for Unit Standard cost calculation.

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