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Costing BOM usage

Hi Experts,

Please explain me with some examples what is the use of " BOM usage (6)costing BOM".

I have the following scenario where i was trying to use the Costing BOM concept.

To produce material 'A', I need component 'B' and 10 other consumable materials.

For the cost estimation purpose, the client wants to put the consumables in the BOM.

The production of A is happening like this, Prod. Order qty of A is 100000 Meter.

The confirmation of A will be taken place partially like 500 m, 700m, 900m...etc.

When i do the confirmation, Auto GR for material A and consumption of components by 261 movement type will be taken place.

Here i can monitor what is the actual consumption of component B and i will enter during confirmation. So that i can get the Plan Vs Actual quantity.

But for consumables i can not monitor what is the actual consumption since it is very less quantity and it will be filled in the tank as a bulk quantity.

Please thro' some light on the following 2 queries,

1.In the costing BOM i will put all the consumables and in Production BOM i will put only the prime material, how to avoid the Variance during every confirmation?

2.If i don't put the consumables in the BOM, i added it in the Costing sheet, and i am issuing all to Cost center by 201 movement type. In this case how to take the Plan Vs Actual variance?

Thanks in Advance.

Bala

Former Member
Former Member replied

Bala,

Purpose of Costing BOM is to get a rough cut cost estimate for a new product which is yet manufactured. Once the process is stablised and established, you need to have Material BOM for Standard Cost estimation and production order creation.

In your case if the value of the consumables are not considerable and incase if your not able to say how much is consumed per order, then the best option is to add this as a Overhead component in Costing sheet, based on Quantity. There wont be any variance as this overhead would also be a part of the Standard Cost Estimate.

Regards,

Prasobh

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