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

70 MFG/PRO USER GUIDE — MANUFACTURING
Some typical steps for calculating average GL costs and average current
costs for co-products follow.
1 Define the average cost allocation methods in Average Cost Method
Maintenance (15.12.5).
2 Verify that the following are correct:
• Co-product/by-product definitions
• Prices for co-products, if allocation method involves price
• By-product costs
• Base process batch size
• UM of the BOM/Formula code for the base process equals the
item UM for the base process
• Site setups for cost sets (GL Cost Set and Current Cost Set)
• Unit of measure conversions from base process to co-products
and by-products
Defining the Average Cost Allocation Methods
Define the average cost allocation methods using Average Cost Method
Maintenance (15.12.5). The system provides three methods for allocating
costs from a joint order set to co-products.
• Price
• Receipt Quantity
• Receipt Quantity and Price
If other methods are needed, users can provide their own programs. If no
method is specified for a site, the Receipt Quantity method is used.
Allocation of base process costs to co-products is based on the cost of a
standard batch size. All allocation percentages are calculated using
equivalent units of measure based on the unit of measure for the base
process. Where co-product units of measure differ from the unit of
measure for the base process, the system employs conversion factors in
order to express all costs in the base process unit of measure.