User Manual

Co-Product BOM

The Co-product BOM functionality allows for the retrieval of other additional products to inventory as a result of one manufacturing order.

This will allow 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:

  1. At Stock -> Items create the articles for the additional products, for example, Waste or Scrap.
  2. Open the BOM of your product, where these items will be produced as additional side-products.
  3. Add the possible additional products in the section Additional product.
  4. 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:

The cost of the additional products

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

Demo video