Example 2: Scrap Transactions - Costing
| Operation | Control Point | Qty Complete | Qty Scrap |
|---|---|---|---|
| 10 | No | 5 | |
| 20 | No | 5 | |
| 30 | Yes | 5 | |
| 40 | No | 5 | |
| 50 | No | 5 | |
| 60 | Yes |
In contrast to production schedule complete transactions, which you record at control points, you report scrap transactions at any operation. In the above example, assume that you reported a quantity of 5 as complete for Operation 30. If you reported a quantity of 5 as scrapped at Operation 50, the system would also backflush for Operations 40 and 50. The system would not scrap 5 or backflush for operation 30 (or prior to it), because it is a control point.
However, the system would calculate the accumulated WIP costs of the scrapped materials for all operations, 10 through 50 inclusive, and move them to the Scrap Expense account.