Allocation of moulds cost to units produced....

[Former Member]

Hi All,

I have an issue... need ur expert opinion on it....

Client is using the die for producing the material...one die is used for sometime...may be it produces 100 or 200 or 500 units...we dont know the exact quantity.

Problem is that client want to allocate the cost of the die on produced units...on no of production orders...at month end. How can we do that???

Thanks in advance,

Rajesh

[Former Member]

Hi,

If I am not wrong check the following points:

1. Usually For moulds fixed capacity will be there which you will get from their tooling dept or tool manufacturers.

Based on the capacity you can define one asset class in Fixed Assets for moulds.

2. When Coming to production if you enter no. of units produced it will calculate the mould cost as (total cost of the mould/total capacity)*no.of units produced.

3. One more way you can create mould activity type and you can give 1 to 1 relation for mould cost and no. of goods produced.

Thanks & Regards,

Kalpana.

[Former Member]

Hi Kalpana,

Thanks for ur response....

I thought of both the solutions which you suggested but I cannot adopt them because there is no fixed capacity of moulds... sometimes a moulds produce 200 units, sometimes 1000....so its very difficult to determine the capacity......Moreover client is expecting us to distribute the actual cost of moulds for a month to the units produced in the month.....Its next to impossible to map 1 to 1 relationship between moulds and units produced.

Can you think of some other alternative by which we can distribute the actual cost of moulds to the production orders....

Thanks in advance.

Rajesh