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I am using standard cost, and have added a fixed quantity to a component of a make item. Costing is set up to prorate using the standard quantity, and I have entered a standard quantity but the cost rollup is adding the cost of the entire fixed quantity to the cost of the parent item. The cost does not divide the fixed quantity by the standard quantity. What am I missing?
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Thanks Bron - but the unit of measure is the same for both - it isn't a use the whole bottle once it is opened scenario - and in actual terms the lot size is pretty variable, so we do expect a variance. I'm surprised that this doesn't work as I thought I had tested in the past the and the fixed quantity was amortized. I will take it up with Microsoft - I thought I had also seen a posting on the net that Becky in support also thought it worked. Digging deeper now.
>That same solvent is used to clean up the work surface after production - and a fixed quantity is required for that post production clean up.
I will consider add into production expense for the quantity which is used for clean up.
Thanks for sharing makes good sense to me.
Have you thought about using different UOM's? In Richard's example (printing press uses 1 roll for each 'setup' - could the BOM have a separate item - Paper UOM = 'Roll' and then a separate item with Paper and the actual amount used per end quantity........
In your case - two items in BOM - with two different UOM's...........if we use '1 bottle' of solvent per MO - then have the solvent have a UOM 'bottle' in BOM while also having the solvent with the base UOM and different BOM quantity?
We use a solvent for an item that has a bill of material per unit quantity that is actually consumed in production on a per unit basis. That same solvent is used to clean up the work surface after production - and a fixed quantity is required for that post production clean up. The solvent is fairly expensive, so including that clean up quantity in the cost makes sense for us.
I think I would take the fixed quantities out of the BOM and manually amortize them into the quantity required. Take the fixed quantity, divide by the average or standard run size and add that much more to the quantity needed per unit in the BOM.
And, yes, put a call in to MS to encourage them to address this
The publishing business uses it as it almost takes a whole roll of paper to start web presses
When I explain fixed quantity to my clients - I explain it exactly has Richard has explained it. The only time I have seen it used is for a furniture manufacturer who had a unique business process. During the assembly process their best manufacturing practice was to open a fresh bottle of wood glue for each 'lot' assembled and then to discard the bottle.
Thus if they made '1' desk - it took '1' bottle. If they made '5' - it still took only '1' bottle.
They were actual cost - so the standard rollup wasn't an issue. I would agree that if they had been standard cost then the fixed quantity should definitely have been prorated.
I'm intellectually curious how your organization is using fixed quantity...........like I said....it's rarely used.
you should also post a suggestion to MBS to 'fix' the current functionality.
Good Luck - anxious to hear back from you.............
Thanks Richard - I have tried using average quantity - same results. Meant to also say that this is on GP2010. I'm in a test database so I have some testing flexibility. Found the problem in live and immediately copied over to test to try and find the problem.
Fixed quantity is that amount that will be used if you make one item or 100,000 items. It is considered the amount needed to setup the machines.
I agree with you that it SHOULD prorate. Have you tried using the Average Quantity and prorating against that?
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