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[Steve Latta]

?Hi all,

Accounting guy here struggling to figure out the manufacturing & costing side of the house, so please bear with me…

I’m trying to figure out production costing. Our current set up:

Formula size: 518 pounds
Yield (on route): 100%
Yield (on formula): 100%
Yield (on released product): 100%
All of the ingredients are percentage controlled.

What I’m trying to achieve is 518 pounds of RM in, the quantities of ingredients used to are based on percentages of that total 518 pounds, and a yielded final product of 474 pounds. 9.15% of the original weight is lost in production. I don’t know if you’d call it scrap, as it could simply be evaporation or material left in the heel of the production vessel. It isn’t a co-product or by-product situation.

I have tried changing the scrap percentage on the route, the yield on the formula, and the formula size and the yield on the released product. When I run the cost calculation, I cannot get the desired result. I’m either getting 518 pounds in and 518 pounds out (if scrap is 0% and yields are 100%) or the weights of the ingredients are scaling based on the formula size. If I set the formula size to 518, the total of the ingredients ends up around 570 pounds. If I set the formula size to 474 pounds, the ingredient quantities aren’t correct because it’s multiplying the percentages by 474 instead of 518. Changing the yield percent on the released product seemed to have no effect on the cost calculation. 

I can only get the desired RM weights in and yield weight out if I set specific quantities in the Consumption per Lot Size field on the formula. That isn’t a reasonable fix when we have hundreds of existing percentage-based formulas in the system already.

#AX2012

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Steve Latta
Accountant
Ortec, Inc.
Easley SC
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