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Jun 30, 2020 at 08:55 AM

How to valuate scrap?

211 Views Last edit Jun 30, 2020 at 08:57 AM 2 rev

Dear experts,

Please help me to find a solution how to valuate different types of scrap.

I have following business cases from production:

  • 1)100% scrap – material is completely scrapped, cannot be used again. At what value should material be scraped? Standard price? What is the procedure
  • 2)Re-usable material – a product (e.g. Product A) cannot be completely scrapped, because material can be used again (foundry). During the production of Product A the amount of material that can be re-used differs from time to time: sometimes it can be 1kg or 2kg. How do I proceed in this case?
  • 3)Rework: some semi-products need extra rework I order to be used in the production further. The amount of rework differs: sometimes it is 2 minutes, sometimes 15 minutes. How do I proceed in this case?

Thank you in advance.

Kind regards,

VS