11 Understand Batch Product Costing

This section contains the topic:

Section 11.1, "About Batch Product Costing."

11.1 About Batch Product Costing

For bills of material and routings, you can have a batch quantity for products that are normally built in specific batch sizes, such as chemicals, food, or petroleum.

To obtain a correct rollup when you use a batch quantity, the accounting cost quantity, the bill of material batch size, and the routing batch size must match, as follows:

Labor and overhead costs are rolled up only if the accounting cost quantity and the routing batch size match.
Material costs are rolled up only if the accounting cost quantity and the bill of material batch size match.

The following table illustrates these possibilities.

Accounting Cost Quantity	Bill Batch Size	Routing Batch Size	Rollup
10,000	10,000	10,000	Complete
5,000	10,000	10,000	None
10,000	5,000	10,000	Labor and Overhead Only
10,000	10,000	5,000	Material Only

If the Simulate Cost Rollup program does not find a bill of material whose batch quantity matches the accounting cost quantity, it uses the zero batch bill. ACQ is the primary UOM.

11.1.1 What You Should Know About

Topic	Description
Displayed quantities	Quantities displayed on Costed Bill are expressed per each unit of measure, not batch quantity. Amounts displayed on Enter/Change Cost Component are expressed in per each primary unit of measure.