HANDLING SCRAP FROM PRODUCTION

Question

Dear All,
How we handle the scrap in inventory from production , my scnario is.
finish good + scrap = raw material1 + raw material2
how we handle this equation in production,and how we construct the bom.
plz give me solution.

Answer 1

Scrap Items Management
During the process of production, some of the items are generated, which are termed as Scrap
Solution :
Scrap will be defined with negative quantity in bill of material.
It is the system logic that Scrap cannot be managed by serial numbers or batch numbers.. To convert the Scrap  stock into batches, use Goods Issue and Goods Receipt function
Issue method for Scrap  should be backflush
Note:
SAP Business One does not consider the child items 'calcprice' in the calculation of the Parent item 'calcprice' when creating a Production Order for a BOM which contains one or more components (Child Items) with negative base quantity. Note! This calculation also affects the Actual Product Value and Actual Components Value fields in Production Order.
So, Scrap  do not affect the cost of the product, and they are received to stock with their current cost. The production/finished product cost will show the cost of total component issued to production.
Production/Finished product cost = sum of component item costs
Note:
Scrap item cost is not reduced from the total production cost/ finished product cost.