Burden allocation
The five methods of burden allocation that you can use when adding a by-product to a formula version are:
Percent - The percent burden allocation method allows the user to specify a percentage value of the total cost of the production order to include as a burden rate for the by-product. This rate increases the cost of the batch order by the burden percentage that is specified on the by-product.
Per series - The per series burden allocation method is a fixed burden amount based on the per series of the by-product line, regardless of the actual amount of by-product that is produced on the batch order. The burden is scaled up or down based on the ratio of the batch order quantity to the per series on the by-product line. Thus, if the burden is set to USD 100 per 1000, and a batch order for 2500 is created, the burden for the by-product on the batch order would be set to USD 250.
None- This method is used when no burden is allocated to the by-product line.
Per quantity - The per quantity burden rate is applied to the by-product based on the quantity of by-product that is produced on the batch order. On the formula by-product line, the rate is set as a value per quantity on the line, and this amount is then scaled up or down based on the ratio of material that is actually reported as finished on the batch order and the quantity on the by-product formula line. For example, if the burden rate is set as USD 50 per 500 produced, and 1000 is produced on a batch order, a burden of USD 100 will be applied to the batch order.
Recycled - The recycled burden is applied at the standard cost of the by-product but is not counted twice in the cost calculation of the batch order. To use the recycle burden, the by-product must be set at standard cost and have an active cost amount. The by-product must also be included as a formula line in the formula to be consumed as a recycled item.
To use the burden allocation, the burden cost category must be set up in the Production control parameters.