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Nov 23, 2018 at 05:42 AM

Overhead applied to Finished Product based on Finished product Output

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Hi,

We have a product which consumes an input material in Base Unit of Measure TO, and a range of ingredients with Base Unit of Measure EA.

Ideally we would like to apply an overhead based on the finished product output however understanding how overeheads work based on input, we are trying to apply an overhead based on both of these inputs.

We are able to create 2 overhead keys, one in TO, one in EA, however because the ingredient quantities are issued in KG, and each ingredient has a different quantity of KG to EA, we are not getting valid results.

The overall aim of this is for the various products to have a very similar cost of production regardless of how much input material/ingredient qty ratio there is.

e.g. 1 TO of Finshed Product Contains

0.9TO Input Material (CElement FP Issued)

150 KG Ingredient Material (CElement Ingredient Issued)

OH Key is set up as $100/TO with both elements as a base, however end result is only $90.

Even if we change the input material to 900 KG and change the OH to $100/1000KG, the ingredient material is not included because its base unit is EA. In this example, we would like the result to be $105.

Any suggestions?