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Resource Costing based on Fixed and Variable

Received Response

Hello - we have the business case as follows

  1. Customer is creating the BOM in discrete MFG
  2. They have fixed batch size though which is 3000 qty.
  3. However they have of the resource (HOT ROOM) which takes almost 24 hours to complete.
  4. so meaning fixed cost of $150 x 24 = $3600
  5. but they wanted to allocate this $3600 based on 1 QTY as per BOM and therefore rolled up cost must be based on 1 qty
  6. Also, there are many cases where the batch size also changes till 2000 or 1000 instead of 3000. In this case, they wanted to allocate $3600 which is fixed.
  7. Therefore, this is a challenge whether we should keep the USAGE is fixed or Variable. In either case, our rolled up cost cannot be based on unit since this becomes a hybrid kind of scenario

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