Tool cost amortisation

hi friends,
i have following query,
we are into auto component manufacturing and get tool cost amortised as part of selling price, ( Sale price is inflated till tool cost is recovered) and tool has specific life of some quantity.
We want to map as follows
Sale proceeds consists of sale price and tool cost
tool cost paid to vendors of in house is capitalised
Depreciation is @ standard rate, where as actually tools get scrapped in lesser period
my question is how to capitalise the tools and write off the same through amortisation.
Milind

Hi,
Using o/h accounting you can book the cost to the Tools.
In pricing you may try condition types to amortise.
hope this helps.
Regards
Ramesh

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Hi
I have a scenario where we use consumable tools in manufacturing the end product , which is 'nut'. We use roughly 80 tools in the manufacturing process. Each tool has its life. For eg. Tool A will be used to manufacture 10,000,000 nuts. The production lot size is usually 900,000 and the tool will be used for more than10 production orders.
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Hi,
is there an operation for tool usage within the production order where time confirmation happens?
And correlates the tool usage with the time confirmed?
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Tool cost ammortize in component price

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Hi Rajiv
Tool amortization cost is the cost to be distributed to the material and has to be the part of material accessible value. To do that create a condition type in your regular calculation schema this you can do by copying a frieght condition type and set the controlling functionalities of this condition type as per your business needs. In this condition type try to assign subtotal 4, 6 etc..as you wish. Now go to your tax procedure in that for Base value condition type assign a routine 362. This is the standard routine. Here you bring the value of subtotal as a addition or subtraction as per your requirement. This you could do with a help of an abaper.
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Dear,
Generally tooling cost will be obsorbed through overhead charges for a cost center. So best way go with overhead cost for PRT. And define it as equipemt PRT.
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Tool cost

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Hi,
If you are using Purchasing Info record better put the cost in the Price itself which is practical
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Hi ,
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About Amortization

Dear All,
I have some questions related to amotization, for which I am unable to get much information from threads.
Please give suggestion on the same.
1. In my company we are adding the "Amortization" value with the basic price. But the client used to pay the amount to us for tools, that needs to be deducted from the basic price. Is my understanding correct?
2. How to identify whether we have reached the amortization amount given by the client?
3. Is amortization value considered for excise duty base value?
Please give your suggestion.
Regards,
Mullairaja

1. In my company we are adding the "Amortization" value with the
      basic price. But the client used to pay the amount to us for tools,
       that needs to be deducted from the basic price. Is my understanding correct?
Amortization can be collected in two ways. One is 100% in advance before developing the tooling and another method is to increase the selling price to the extent of tool cost value.
For example, if customer release an order for 1000 nos. of material A. Selling price of this material A is Rs.100 and the tool cost for developing the tool to supply 1000 nos. is Rs.50000. Your sale order rate should show Rs.100 and Rs.50 (Rs.50000 / 1000 nos.) separately.
2. How to identify whether we have reached the
           amortization amount given by the client?
Explore the facility Lower limit and Upper limit in pricing condition
3. Is amortization value considered for excise duty base value?
Yes as per Central Excise Rule, you are suppose to pay duty on amortisation of tooling cost also. This means, you should have two condition types in your pricing procedure; one for selling price say PR00 and another one for assessable value say ZR00.
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G. Lakshmipathi

Tool cost amortisation

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