Costing co-products/byproducts

Chris Kelleher

Administrator
Staff member
Hi all!

I've got a question regarding costing co-products and by-products (using standard costs):

According to the manuals (8.6), to calculate the cost I have to:

Allocate the costs to co-products (done when creating the structure).
Freeze the co-product's costs.
Enter by-product costs.
Freeze by-product costs.
Perform a structure roll-up.

If I read it right, I have to manually calculate the cost of the base process (labor, burden & subcontract) manually and then use this cost (minus whatever by-product costs I can identify) to allocate costs to each co-product.

When I run the structure cost roll-up it will calculate material and this level labor and burden costs and roll up my lower-level costs.

IOW, I'll always end up doing the "routing part" of the roll up by hand?

Now, there's something else that confuses me: if I freeze the costs of the co-products and the by-products, how will I be able to do a structure roll up that will affect them? If their cost is not affected that means that the structure roll-up phase will not be complete hence my costs are going to be incomplete.

Can somebody please shed some light on how costing of co-products/by-products takes place?

TIA,

Carlos

=======================================================
Carlos Colmenares http://www.protech.com
Senior Programmer ccolmenares@protech.com
Protech Systems Inc. (609) 714 0700 - Ext. 50
PEG Member 1999061404
I'm the only one to praise/blame for whatever I do/write/say
=======================================================
"Quick to judge, quick to anger - slow to understand
Ignorance & prejudice & fear walk hand in hand"
RUSH - Witch Hunt.
 

Chris Kelleher

Administrator
Staff member
Carlos,

Do not freeze coproduct costing. Only freeze the byproducts. Think of it
this way you are going to fix the byproduct cost to be a particular amount.

The you have a Joint Process that contains a number of coproducts and one or
more byproducts. Make sure the Joint Process has a routing assigned to it.
Roll up the routings then a cost roll up.

What will happen is that the total cost is determined, byproduct (frozen)
cost removed then the remainder is allocated among the coproducts by virtue
of the BOM.

Hope this helps!

Bill Storr
Mgr of Manufacturing Services
Exolon-ESK
 

Chris Kelleher

Administrator
Staff member
Dear Carlos,
Do not freeze co-product costs, only by-product.
1. When you define product structure for the BASE-PROCESS you set % of cost
allocation for each co-product.
2. First run Routing Cost Roll-UP to establish this-level costs then run
Product Structure Cost.

I hope it can help.

Boris Melenevski,
Project Manager,
Business Management Sytems,
QAD Business Partner in Russia,
Moscow, Profsoyusnaya st. 84/32
Phones: 330-4164, 330-0678, 330-2659
Fax: 333-8212
Mail: bob@bms.ru
 
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