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Former Member
Nov 27, 2011 at 06:52 AM

Subcontracting for standard cost material

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Hi

We have scenario where 95% of the Semi finished product will be produced in house where we will be using standard BOM, Routing.

Now in case of Plant Breakdown, the raw materails will be given to the subcontractor and he will perform the process and sent us back the fsemi inished product.

We are dealing with only One number of semi finished product here and only one work center. So if one machine fails the entire processing will be done at the sub contractor and will receive the semi finished product.

In this case how to handle the subcontract charges which occurs rarely only in the event of machine break down.

For info- we are using std price for that One semi finished product.

Thanks

Aravind