Understanding the Co/By-Products Planning Table Program

You use the Co/By Products Planning Table program (P3404) to determine:

The percentage of the demand for co-products that is satisfied from process work orders.
The percentage of the manufacture for the item that is satisfied from other sources, such as purchase orders or work orders for the co-products themselves.

You set up the planning table to specify the process that the system uses to calculate the costs of co-products and by-products, as well as the processes that the system uses for demand planning. Because a co-product or by-product can be produced by more than one process, depending on how often a process is used, you can assign a weight to the costs for each process on the planning table.

Normally, all demand for co-products and by-products is satisfied from process work orders. However, you can specify a percentage from the item process and from a bill of material and routing for a discrete co-product. To do so, enter less than 100 percent in the table. For example, you might enter 50 percent for the item process. The remainder is satisfied by discrete work orders for the co-product.

You can also have a co-product that is produced entirely by more than one process. For example, two processes can have a 75 percent to 25 percent relationship between them. Both processes appear on the Co/By-Products Planning Table form when you locate the co-product. In these situations, you must set up the Co/By Products Planning Table with a cost percent equal to 100. This ensures that the rollup program calculates the costs of co-products and by-products correctly.

When more than one process creates the same co-product or by-product, use the planning table to allocate the cost of the co-product or by-product among the processes. You can assign a weight to the costs from each process.

For example, you might have a co-product that is produced by two processes:

The normal manufacturing process, which you use 90 percent of the time.
A second process, which you use for rush orders 10 percent of the time, and that has costs that are much higher than the normal.

You can set up the planning table that enables the standard cost of the co-product to reflect the extra costs that you incur 10 percent of the time.