Share
Report
6Hi guy,
I have an issue related to cost allocation in formula.
In a formula setup, I have materials A, B, and C, and co-products D and E. When calculating costs:
- Materials A and B should allocate costs to D.
- Material B, C should allocate costs to E.
This situation involves plastic molding, where the input includes plastic and two different circuits (Circuit 1 and Circuit 2). The outputs are two types of wheel rims, each containing one circuit, while plastic is shared between both rims.
The challenge: The cost of circuits fluctuates heavily (30–40%), making percentage-based allocation inaccurate. Any suggestions for a better approach?
Thank you in advance!
Categories:
All responses (
Answers (
