Skip to Content
author's profile photo Former Member
Former Member

Costing during Plant shutdown

Hi

We are using actual activity price calculation and revaluation using actual prices. In case, a part of Plant (lets assume 1 Lathe machine out of 4) is shut down during the month for 15 days, how to capture the shutdown cost and not take it to cost of production. We currently have only 1 Cost Center for all the 4 Lathe machine (though they are different work centers in PP). During the month end at revaluation at actual prices, all the costs on Lathe machine 1 will be considered for actual activity price calculation and will be charged on to the product cost. How to avoid this and charge costs during shout down to period costs rather than product cost. Any advice will be highly appreciated

Thanks and Regards

Shiv

Add a comment
10|10000 characters needed characters exceeded

Assigned Tags

Related questions

3 Answers

  • Posted on Nov 02, 2012 at 12:51 PM

    Hi

    If you have single cost center, then its not possible.. You need to have separate cost center for that

    However, as far as the dep of the machine is concerned, you can put a shutdown indicator in the asset master and stop dep posting

    br, Ajay M

    Add a comment
    10|10000 characters needed characters exceeded

    • Former Member Ajay Maheshwari

      Hi Ajay - Thanks for your reply again. But when i calculate PUP at month end, the cost will appear as a product cost and system will show incorrect product cost for the month. This data is not good for COPA reporting nor for setting selling prices for materials if somebody wants to do that. Is there a way i can avoid this and charge the corresponding cost of shutdown as period cost rather than product cost

      Thanks and Regards

      Shiv

  • author's profile photo Former Member
    Former Member
    Posted on Nov 02, 2012 at 04:27 PM

    Hi Shiv,

    You can create machine wise cost centers and assign to work centers, Also maintain the activity prices for that cost centers.Confirm the Production operations machine wise, you will get machine wise actual activity cost.

    Regards,

    Puri

    Add a comment
    10|10000 characters needed characters exceeded

  • author's profile photo Former Member
    Former Member
    Posted on Sep 28, 2014 at 12:16 PM

    Dear Shivendra,

    hope you have got your answer.

    I need your help on similar issue........my plant has taken complete shut down. As cost during this shut down period are not cost of production.

    1. Where to show these costs in my cost sheet for the month.

    2. If I am correct .. I should also not load fixed cost of this period over remained finished goods inventory as it will double the cost of existing stock.. Do I need to show cost of this period separately from cost of goods sold or cost of sales during the period for recovery.

    Please guide.

    Add a comment
    10|10000 characters needed characters exceeded

Before answering

You should only submit an answer when you are proposing a solution to the poster's problem. If you want the poster to clarify the question or provide more information, please leave a comment instead, requesting additional details. When answering, please include specifics, such as step-by-step instructions, context for the solution, and links to useful resources. Also, please make sure that you answer complies with our Rules of Engagement.
You must be Logged in to submit an answer.

Up to 10 attachments (including images) can be used with a maximum of 1.0 MB each and 10.5 MB total.