A company produces generic and name-brand paper plates in the same factory using standard costing and using the same Bill of materials and routes to produce both products.
The finance and production teams want a way to view individual raw material consumption costs in the ledger.
You need to add a production group to control postings to the ledger.
What should you do?
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A. B. C. D.A.
In order to provide a way to view individual raw material consumption costs in the ledger for both generic and name-brand paper plates, a production group should be created. This will allow for separate tracking of costs for the two types of products while still using the same Bill of Materials and production routes.
Option A - Create a production group for the finished good item: This option is a valid solution as it provides a way to group the production of the two types of paper plates together while still allowing for separate tracking of costs. A production group can be created and then associated with the finished good item, which will control how postings to the ledger are handled.
Option B - Update the cost of the generic finished good item: This option would not provide a way to separately track the costs of the raw materials for the two types of paper plates. Updating the cost of the generic finished good item would only affect the overall cost of producing that item.
Option C - Create a production pool for the finished good item: This option is not a valid solution as production pools are used to group production resources together, not finished goods.
Option D - Create a new Bill of materials with alternate costs for the raw material: This option would create separate Bills of Materials for each type of paper plate and would not allow for the same Bill of Materials to be used for both types of products. This would result in additional maintenance and potential confusion in the production process.
In summary, the best solution for providing a way to view individual raw material consumption costs in the ledger for both generic and name-brand paper plates would be to create a production group for the finished good item.