01-18-2007, 10:14 PM
I'm looking for principles rather than answers to guide me along.
here are the point of uncertainty that i hope someone could clarify.
Because the shelves are made of a natural material that has imperfections, one shelf is normally rejected for each five that are accepted (the rejected shelves are totally scrapped).
Therefore
1) Would this rejected shelf be considered into standard quantity or cost ( my assumption is yes and it's standard quantity)
2) Would the standard cost per component would then be multiplied by 6 and divided by 5 to offset the rejected 1
3) The wastage if taken into consideration, would be taken into the product input rather than product cost isnt it. If standard for 1 is 1m at $10 per meter. the standards would then be 1.2m at $10 not 1m at $12 to take into account the wastage isnt it?
note reread it again and it seems that i might not be making sense.
What i am asking is that is the rejected shelf input into the standard cost since it is a recurring thing it's probably a standard cost component as well. And if it is inside, under which part would the wastage fall into? adding extra to the material length or the standard cost per meter? Or are wastage to be treated as an entry on it's own.
here are the point of uncertainty that i hope someone could clarify.
Because the shelves are made of a natural material that has imperfections, one shelf is normally rejected for each five that are accepted (the rejected shelves are totally scrapped).
Therefore
1) Would this rejected shelf be considered into standard quantity or cost ( my assumption is yes and it's standard quantity)
2) Would the standard cost per component would then be multiplied by 6 and divided by 5 to offset the rejected 1
3) The wastage if taken into consideration, would be taken into the product input rather than product cost isnt it. If standard for 1 is 1m at $10 per meter. the standards would then be 1.2m at $10 not 1m at $12 to take into account the wastage isnt it?
note reread it again and it seems that i might not be making sense.
What i am asking is that is the rejected shelf input into the standard cost since it is a recurring thing it's probably a standard cost component as well. And if it is inside, under which part would the wastage fall into? adding extra to the material length or the standard cost per meter? Or are wastage to be treated as an entry on it's own.
