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Former Member

material cost calculation without scrap

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

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3 Answers

  • Posted on Jul 22, 2010 at 02:33 PM

    Hi

    I dont think that is possible... Your standard costs are supposed to reflect the scrap as well, else you will always endup showing unfav variance..

    If you include component scrap in BOM, that will have an impact over the standard cost....

    If you still want it, remove the scrap from the BOM, run the std cost and then update your BOM with component scrap

    Regards

    Ajay M

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  • author's profile photo Former Member
    Former Member
    Posted on Jul 22, 2010 at 03:58 PM

    Hi

    Go to Material master - costing tab - select Do Not Cost option.

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  • author's profile photo Former Member
    Former Member
    Posted on Jul 23, 2010 at 01:59 AM

    Hi,

    Probably the simplest option would be to create another BOM (costing BOM) and asign it to quantity determination structure in product costing.

    Of course this new "costing" BOM should not contain scrap.

    Cheers,

    Szymon

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    • Former Member Former Member

      Hi Vela,

      actually I have to deal with the same requirement.

      But to maintain a second BOM (without scrap) or to delete/set scrap in the material master is to extensive (time consuming/complex). The other point is, that we maintain scrap not in Material Master but individual for each Material in BOM.

      my question is: Did you try also other options e.g. user exit or something else?

      Thanks

      regards

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