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Former Member
Jul 22, 2010 at 02:04 PM

material cost calculation without scrap

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Hi all,

I have a requirement to estimate material cost of a product without any scrap, although there are component scrap percentage maintained for some components.

Example

To produce one X needs one raw material A. Material A has a component scrap of 10% and one part costs 10 EUR.

To produce 100 of product X you need 110 of material A. That is ok for production, but in the calculation of X the costs are 1100 EUR. Finance wants the cost without scrap of 1000 EUR as standard price.

Is it possible to exclude the scrap in the calculation?

Thank you for your help.

Regards, Vela