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Former Member
May 12, 2010 at 04:55 PM

Component & Operation scrap

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Hi gurus,

I have the same problem of other colleague and I need help. I have a requirement to estimate material cost of a product without any scrap, although there are component scrap or operation scrap percentage maintained for some components. Can I do calculate standar cost without this desviation by scrapping??

Example copied from other colleague;

"To produce one X needs one raw material A and one raw material B. A's price is 10 and B's price is 5. So one hundred X has material cost 1500 (10 x 100 + 5 x 100). Suppose B has component scrap rate 1%. Now the standard cost estimate of one hundred X will become 1505 (10 x 100 + 5 x 100 + 5 x 100 x 1%). The scrap rate is just for movements purpose and our Finance do not wish the cost took the scraps, which should still be 1500 as in above example."

Is possible any idea?

Thank you!!!!!

I will revvard all answers!!