Can PMAC be run Daily and Can we see the Batch Update Cost Daily?

Question

Dear Gurus,
My Client wants to see Daily Updated Cost each end of day Through PMAC. Is it possible to run daily and Can we also see the COGS too.
Now we have a Requirement here :
My Clinet During the Production Process uses : Boiler Fuel, Chlorine, Electricity, Caustic Soda,Chain Lube, Generator Diesel.
They would like to see each day how much has been consumed along with the cost during the Production Process at each end of the day and apportion the above things to all across the batches as per their KPIs (Key Performance Integrator).
Now the challenge we cant take these Parameter as ingredients in Formulas. So Please guide us in providing the solution.
They also informed us that they can not give these things in Hourly Basis. So Please Provide us the solution how to take this parameters to derive COGS..
Please advice me.
Regards,
John

Answer 1

Dear John,
In Actual costing, PMAC, by definition, derives the weighted average rate only at the month end. You can refer to last period cost as a reference to perform Batch Cost SIMULATION (COGM). Same is the case with simulated COGS.
Now coming to the problem of Cost Allocation. Let us discuss various options.
Option1: FOH - Let us start with the simple one:
- Consider all the indirect mfg. expenses as a Cost Component - Factory Overheads.
- Derive standard rate (FOH/Unit) and apply it to onto products based on cost driver such as Production Volume cost components.
- Once FOH applied for the last period, current period can use this as reference.
Option2: Machine Recovery Rate, Utility Cost - Now let us try bringing in more precision by effective use of Routing definitions in Recipe:
- You have mentioned that we cannot consider cleaning material, Utilities (Electricity, Water, Fuel) as a part of formula. So we consider Routing to absorb such cost (Equipment Cost, Utility Cost, Cleaning Material Cost) associating the Unit Rate to various activities in the Operations.
- Define separate Cost Components - Equipment Cost, Utility Cost
- With this definition, you will able to absorb the major part of the factory overheads in the production batches.
- Rest of the indirect mfg. cost can be allocated onto the products as in option 1 at the month end @ actuals.
This is very interesting topic from Activity Based Costing view point. Let us request cost accountants to contribute to this discussion.
Regards,
Sanjeev