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

72 MFG/PRO USER GUIDE — MANUFACTURING
Table 5.3
Co-product Costs
Allocated by Price
and Receipt
Quantity
Table 5.3 shows how costs are allocated by receipt quantity and price.
Rcpt Rcpt Qty
Price Price Price/Rcpt
Item UM Conv Qty (KG) Price (KG) Qty Allocation
P1 KG 1.00 50.00 50.00 2.00 2.00 100 38.48%
P2 KG 1.00 30.00 30.00 4.00 4.00 120 48.15%
P3 LT 0.50 40.00 20.00 1.00 2.00 40 15.38%
Average Cost Accounting
WIP costs are the sum of component costs and shop floor control costs,
and are reduced by the cost of co-products and by-products received plus
reject quantity. These transactions do not update GL or current costs.
Costs are averaged by taking the costs accumulated in WIP and adjusting
the costs of items in inventory received from WIP. MFG/PRO does this in
two steps.
1 Co-products and by-products are received from work orders into
inventory using their current average costs.
2 Average GL costs and average current costs are re-averaged based on
the costs accumulated for an item’s work order when the work order
is closed. Co-product costs are re-averaged based on any WIP costs
accumulated by this process. Costs can be accumulated when the
Work Order Accounting Close program closes any work order
operations that have not been closed.
Costs are not re-averaged for quantities received to sites other than the
work order (WIP) site. Receipts are handled in two ways depending on
whether the work order status is closed or not closed.
• Not closed. Co-product costs are not re-averaged. Items are received
to the work order WIP site using current average costs. These costs
are deducted from WIP. If quantities are received at a different site,
they are received at the work order WIP site using current average
costs, then transferred to the indicated site.