Subcontracting for standard cost material

[Former Member]

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

[ajaycwa1981]

Hi Aravind

Manage the exceptions in exceptional way.. Its often difficult to set up a process to manage the exceptions

What you said is an exceptional case.. So, let it be like that.. i.e.

-Dont have any Split Valuation....

-Have just one std cost based on BOM+Routing

-Whenever you subcontract, the difference between (Consumption of Inputs + Sub Con Charges) AND Std Cost will be accounted as PRD... So, let it be like that and treat as overhead in Costing

br, Ajay M

[Former Member]

Use split valuation, and define procurement alternatives, you can search this fourm for details, they ate discussed a number of times.

Thanks

Naveen

[Former Member]

HI

I have gone thru the earlier postings,

But what i like to understand further is the accounting entries at Goods issue for that material.

I always want to issue at the standard price for that material.

Thanks

Aravind

[srinivasa_maruvada]

Hi

Use spilt valuation functionality at SPRO-Materials Management-Valuation and Account Assignment-Split Valuation and make sure to change at OKKN Costing Variant/Valuation Variant/sub contracting or Ext processing

Srinivas