Treatment of 100% Reusable scrap
Could anyone please suggest me, how to do costing of 100 % reusable scrap.
As per our current scenario, according to BOM, Making 50 Tons of 1 liquid raw material requires 14 tons scrap(28%) because that scrap is 100 % reusable and extracted from previous production order.
But we have not assigned any BOM for that scrap material, we have just given planned price which is very negligible .0032/kg. The cost of that liquid raw material is coming .90/kg after adding cost of scrap which is .0032/kg(because scrap is included in RM BOM).
So, our current adopted method is right or we are doing it wrong, please suggest??
Can we change planned price to .90/kg of scrap or .0032/kg is correct?? or we have to assign BOM for scrap also?? Please suggest