The following is a simulation of production cost for Production Assembly and Disassembly.
Items used in the calculation are as follows:
ITEM1 - Raw Material Component 1
ITEM2 - Raw Material Component 2
ITEM3 - Finished Product
Assume component and finished goods are setup as Weighted Average in Item Master.
Bill of Material (B.O.M) is setup as below:
Assume there are multiple purchase of ITEM1 and ITEM2 with various cost. Below is a computed weight average cost for components.
Assembly Production Order is raised that consumed 1 ITEM1 and 1 ITEM 2 raw material component.
The production cost of the assembly finished product is calculated as below, i.e. using the weighted average cost of the components.
Assume there is a new purchase of component after the assembly production. The weight average cost of the component is now updated.
When disassembly of the prior the production order, it will calculate the variance between the old and new cost.
