CO-PRODUCT COST ALLOCATION TYPES
- 30 Ocak 2023
Hello everyone;
On this post, i am going to tell about co-products’ cost allocation types in process manufacturing. This functionality is only applicable on formula type productions (Batch Productions). There are three allocation type options:
None: If allocation type sets to “None”, production line costs are not distributed to co-products that are set to “None”. Allocation percent is not editable for “None” type.
| Item number | Quantity | Cost price | |
| Production | Product-1 | 1 | 25.00 ₺ |
| Production line | ProductLine-1 | 3 | -25.00 ₺ |
| Co-Product | CoProduct-1 | 1 | 0.00 ₺ |
| Co-Product | CoProduct-2 | 2 | 0.00 ₺ |
Manual: If allocation type sets to “Manual”, allocation percentage must be defined manually on co-product line. Production line costs are distributed proportionally to co-products that are set to “Manual” .
| Item number | Quantity | Allocation percentage | Cost price | |
| Production | Product-1 | 1 | 40.00% | 10.00 ₺ |
| Production line | ProductLine-1 | 3 | -25.00 ₺ | |
| Co-Product | CoProduct-1 | 1 | 20.00% | 5.00 ₺ |
| Co-Product | CoProduct-2 | 2 | 40.00% | 10.00 ₺ |
None + Manual:
| Item number | Co-product cost allocation | Quantity | Allocation percentage | Cost price | |
| Production | Product-1 | 1 | 80.00% | 20.00 ₺ | |
| Production line | ProductLine-1 | 3 | -25.00 ₺ | ||
| Co-Product | CoProduct-1 | Manuel | 1 | 20.00% | 5.00 ₺ |
| Co-Product | CoProduct-2 | None | 2 | 0.00% | 0.00 ₺ |
TCA: If allocation type is going to be set to “TCA”, total cost allocation checkbox must be marked and at least one planned cost that is actively verisoned must be defined for each co-products. System calculates for each co-products cost allocation percent automatically. It is calculated as (co-product’s planned cost * co-product quantity)/(-1*total production line costs) (TCA is going to be published more detailed on my following post).
| Item number | Quantity | Planned costs | Allocation percentage | Cost price | |
| Production | Product-1 | 1 | 0.40 | 10.00 ₺ | |
| Production line | ProductLine-1 | 3 | -25.00 ₺ | ||
| Co-Product | CoProduct-1 | 1 | 5.00 ₺ | 0.20 | 5.00 ₺ |
| Co-Product | CoProduct-2 | 2 | 5.00 ₺ | 0.40 | 10.00 ₺ |
SCENARIO:
A formula version scenario – contains ProductLine-1 as formula line and COPRODUCT-1 and COPRODUCT-2 as co-products and respectively, co-product allocation types “Manual” and “None” are assigned to them- is created for Product-1.
After ending the batch order, the result is as shown below:
Kind regards.
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