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

Allocation by Price
The percentage of cost to allocate to a co-product is determined by its
price, relative to the prices for the other co-products from a base process.
Table 5.1 shows how costs are allocated by price.
Item UM Conv Price Price (KG)
Price Based
Allocation
P1 KG 1.00 2.00 2.00 25%
P2 KG 1.00 4.00 4.00 50%
P3 LT 0.50 1.00 2.00 25%
Allocation by Receipt Quantity
The percentage of cost allocated to a co-product is determined by the total
quantity produced (plus reject) for the co-product, relative to the receipt
(plus reject) quantities for other co-products of the base process. Table 5.2
shows how costs are allocated by receipt quantity.
Receipt Qty Receipt Based
Item UM Conv Receipt Qty (KG) Allocation
P1 KG 1.00 50.00 50.00 50%
P2 KG 1.00 30.00 30.00 30%
P3 LT 0.50 40.00 20.00 20%
Allocation by Receipt Quantity and Price
The percentage of cost allocated to a co-product is determined by the
extended price of the total quantity received plus reject for that
co-product, relative to the prices and receipt plus reject quantities for the
other co-products from a base process. All quantities are converted to the
base process unit of measure.
CO-PRODUCTS/BY-PRODUCTS 71
Table 5.1
Co-product Costs
Allocated by Price
Table 5.2
Co-product Costs
Allocated by
Receipt Quantity