MFG/PRO 9.0 User Guide Volume 3: Manufacturing - QAD.com

66 MFG/PRO USER GUIDE — MANUFACTURING
Fig. 5.7
Typical Cost
Calculation Work
Flow for
Co-products
Ï See “Setting Up a
Co/By-product
Structure” on
page 60.
Calculating Costs and Lead Times
Co-product costs and lead times are calculated by the same MFG/PRO
programs that calculate regular costs. Figure 5.7 outlines some typical
steps for calculating and allocating co-product costs and lead times. Each
step is discussed in more detail in the sections that follow.
Allocate
Allocate
costs
costs
to
to
co-products.
co-products.
Have
Have
system
system
calculate
calculate
bybyproductproduct
costs
costs
from
from
structures,
structures,
or
or
enter
enter
costs
costs
manually.
manually.
Freeze
Freeze
by-product
by-product
costs.
costs.
Roll
Roll
up
up
lower-level
lower-level
costs.
costs.
Allocating Costs to Co-products
Define
Define
average
average
cost
cost
allocation
allocation
methods
methods
to
to
be
be
applied
applied
at
at
work
work
order
order
close.
close.
Roll
Roll
up
up
lead
lead
times.
times.
Verify
Verify
that
that
costs
costs
are
are
correct
correct
for
for
base
base
process
process
items
items
and
and
their
their
lower-level
lower-level
components.
components.
Assign cost allocation percentages in Process/Formula Maintenance
(15.18) or Co/By-Product Maintenance (15.12.1).
The same co-product can result from more than one base process, but
only one base process determines a co-product’s cost at a particular site.
That is, a co-product receives costs only from the base process specified
in the BOM/Formula field of the co-product’s item record.
Example Base Process A produces three co-products—pitted prunes,
prune juice, and prune purée used to make Danish pastry. It also produces
one by-product, pits. The net cost calculation for Base Process A is as
follows.
Gross Cost (Base Process A) $105
By-product Costs 5
Net Cost (Base Process A) $100