Unit Cost calculation for Manufacturing

dede_aja_tuh

Dear all,

I have a question.

Module: Advanced Management
Process: Manufacturing

Scenario:

We have a production order for Item X qty: 10 units.
The Bill of Material for item X is

Raw Material A Qty: 1, Unit Cost: $10
Raw Material B Qty: 2, Unit Cost: $10

In other words, to produce 10 units of item X, total Cost: $300 ( Raw material A 10 x $10 + Raw Material B 20 x $10 )

We do a full consumption journal for that production order. so that cost of 10 item X at this point of time is $300. i.e 1 item X is $30.

when we do output journal of 6 item X, and put 4 item X to scrap, and change the status of production order to 'finished', automatically the unit cost of the Item X in the item card is calculated as $50 ( $300/ 6 units ).

Question:
Why is the total cost of Item X not $180?i.e item cost per unit is $30 and put the value for the 4 item X to an account called Scrap or Expense?

Is there a setting for this?

thank you

AdamRoue

I presume you are not standard costing? Have you run teh adjust cost item entries?

Cannot remember the scrap settings and I do not have the software, but that is a start!

dede_aja_tuh

Halo Adam,

thank you for the reply. When i try the problem, i use Costing Method : Average for both Component and Main Item. Maybe depending on your information, i should try Costing Method : Standard to Main Item.

But Adam, i just want to know, anyway or anything in NAV, how to treatment SCRAP in Production module if i want to make the SCRAP became expense for the company?

Many thanks for the advice.

AdamRoue

Standard is standard hence why I asked.

My memory is that the cost is attributed across all items when the adjust cost item is run in the scenario you discuss, but this could have changed in AX2009.