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Treatment of 100% Reusable scrap

Dear Experts,

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

Regards,

Sushant

Former Member
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