Hello all,
I have a question regarding item cost in a moving average system.
I'm using the OITW table to find the current item cost of a product, we'll call it Product A. Product A requires assembly of Raw Materials 1, 2, and 3. I need to know the break down of where the costs of Product A are allocated amongst Raw Mat's 1-3.
For example: OITW tells me Prod A has an item cost of $10. I need to get to the costs of Raw Mat's 1, 2, and 3 where they all sum up to $10.
I have a query that looks at the bill of materials to determine the cost of the child items accounting for the quantities that go into the finished product, but the sum of the child items never comes out to the final products cost. Most of the time it's close, but sometimes the sum of the parts are around half or even twice as much as the parent cost so I don't trust my method. I'm at a standstill with this; I can't seem to find a way to determine how the cost is divided up.
Maybe even just an explanation of how an assembled product's cost is determined.
Any help with this would be greatly appreciated, thanks!
-Andrew