The Co-product BOM functionality allows for producing additional products as a result of one manufacturing order.
This allows line workers to report the number of co-products, side products, rejected products, or scrap.
This functionality can be enabled at Settings -> System settings -> Professional functions -> Co-product BOM.
Configuring additional products
Co-products must be previously configured in the BOM of the main product before these can be reported.
To set up additional products:
- At Stock -> Items create the articles for the additional products, for example, Waste or Scrap.
- Open the BOM of your product, where these items will be produced as additional side-products.
- Add the possible additional products in the section Additional product.
- Set the percentage of total MO costs, that are allocated to co-products. (If undefined, the cost is 0.)
Reporting co-products, adding additional products to stock
Additional products can be reported in several places:
- Co-products are added to stock when these are reported by workers in My production plan or in the Internet-kiosk when they pause or finish a production operation. The software will ask the quantities of products and additional products that have been processed.
- Also, co-products can be reported in the manufacturing operation details. Read: How to edit operation in a Manufacturing Order?
It is possible to divide the costs of a manufacturing order between the main product and co-products of the main product. To do so, a percentage of costs that are allocated to co-products must be set in BOM details. A percentage is set per one unit.
By default, if the cost percentage is not defined for co-products, the cost of the additional products created is 0.
For example, with one co-product, if 20% of costs are allocated to a co-product, then
- each item of co-product will be 4 times (80/20) cheaper than one item of the main product.
- If total MO cost is $1000, 24 main products and 4 co-products are made, then costs will be allocated as follows:
|Total MO cost:||A = Direct materials + Direct labour + Mfg. overhead =||$ 1000|
|Cost of 24 main products:||B = A x 24 x (80 / 100) / (24 x (80 / 100) + 4 x (20 / 100)) =||$ 960|
|Cost of 4 co-products:||C = A x 4 x (20 / 100) / (24 x (80 / 100) + 4 x (20 / 100)) =||$ 40|
|Cost of 1 main product:||D = B / 24 =||$ 40|
|Cost of 1 co-product:||E = C / 4 =||$ 10|