Allocating depreciation to the cost of a mfg. prod

ocanler

I'm looking for a solution to an interesting challenge in the correct allocation of depreciation of some very expensive molds. We currently allocate direct labor and overhead to the cost of our manufactured products based on the work center card (we have a direct unit cost $, and an indirect cost %) used in the routing of the part. Most of our products are assembled but recently we have decided to fabricate in house some of the products. We are having to buy some very expensive molds for these items we will fabricate in-house. If I keep the current allocation method, all of our products will be impacted by our increased overhead (because we allocate overhead based on time at the work center level). I'm looking at being able to add a depreciation cost only for these manufactured items that will be using these molds. For instance, anytime we produce a part, add $5 of depreciation to the cost of the product. I have thought about using machine centers and it seems to work if one can remember to change the unit from time to qty everytime a part is work order is closed. Very tedious.
Any advice would be greatly appreciated.

Thanks

navian

Hi ocanler,
Interesting challenge. :-k
What about having a separate line in the Routings containing a 'MOLD COST' Workcenter that is set to Specific Unit Cost and Unit Cost Calculation = Units (then you will be able to specify a separate cost per unit per routing). Using Backward flushing in that Workcenter will take care of the postings, so it is all automatic.

Just a thought.....

Let me know how you solve this in the end!