Co-Product Mix Distribution Formula

The system uses the formulas shown below when calculating co-product mix distributions for material, labor, and machine cost.

The co-product cost distribution is generated through these forms:

  • Co-Product Mix Operations
  • Job Orders
  • Co-product Job Orders
  • Generate Co-product Mix Cost Distribution

Co-Product Material Distribution Percentage

Co-Product Material Cost % per operation = (Material Cost in Co-Product Item BOM * Co-Product Quantity) / Total Material Cost in Combined Co-Product BOM

Co-Product Labor Distribution Percentage

Note:  Setup costs are not used when calculating the labor cost distribution. Setup costs, however, are distributed among the co-product items in the job based upon the labor cost distribution.

Co-Product Labor Cost % per operation = (Labor Cost in Co-Product Item BOM * Co-Product Quantity) / Total Labor Cost in Combined Co-Product BOM

Co-Product Machine Distribution Percentage

Co-Product Machine Cost % per operation = (Machine Cost in Co-Product Item BOM * Co-Product Quantity) / Total Machine Cost in Combined Co-Product BOM

Related topics
About Co-Product Mix Validation
About Co-Products and By-Products
About Standard Costing
Co-Product Mix Operations
Costing Overview
Example: Co-Product and By-Product Costing