I was wondering how I could produce two finished items using the same bill of materials simply because it is difficult to separate the bill of materials for a single finished item hence the need to have two finished items at once…if relevant I’m using version 21.7.1 windows 10
Oh no😭so what should I do to have accurate records with the same bill of materials for two finished items…like any ideas would help basing on my screenshot simply because the finished items are two separate inventory items produced at once
You can create another production order without raw materials
The only thing you can do right now is enter multiple production orders, one for each finished inventory item. You have already seen that you can put fractional units of items in the bill of materials. You would do the same thing with the second finished item. For example, if 4 bags of cement, 4 cans of water, and 5 wheelbarrows of sand produce 20 T Pavers and 10 Border Bricks in one process, always create two production orders as below:
| Prod. Order | Finished Item | Finished Qty | Bill of Matl. Item | Bill of Matl. Qty. |
|---|---|---|---|---|
| 1 | T Paver | 20 | Cement | 2.5 |
| Water | 2.5 | |||
| Sand | 4.7 | |||
| 2 | Border Brick | 10 | Cement | 1.5 |
| Water | 1.5 | |||
| Sand | 0.3 |
(Of course, I have no idea if the quantities are correct.)
That would possibly work…but…the average costs will be practically wrong for the second production order without raw materials…
The thing is, if you think about it really, there’s only one of three possible scenarios where 1 process gives 2 products:
A. One product is a byproduct which should have no cost since it’s incidental and no resources were directly allocated to it’s production.
B. The two products are a result of two similar processes which happen in parallel. In that case you should create 2 production orders and allocate resources based on standard costs as @Tut already suggested; or
C. The products share the same process to create a WIP product that is then used to create each finished product separately. In that case you should have 3 production orders: 1 for the WIP process and 1 for each finished product.
Even if Manager developer for two products, it’s more likely to implement a percentage based method which isn’t really accurate.
If you’re seeking accuracy you will need to adopt one of the methods described above and not rely on arbitrary allocations.
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This is practically impressive! So my worry is…is it allowed in accounting to use ratios of my bill of materials and is it accurate when calculating my average cost… forexample…if I produce 5 pavers at once but 2 are T pavers and 3 are rectangular pavers using
- 2 bags of cement
- 4 brr of sand
- 2 jrr of water
So, is it accurate and acceptable to make two different production orders each having let’s say for T pavers according to a ratio of
⅖ x 2 bags of cement = #
⅖ x 4 brr of sand = ##
⅖ x 2 jrr of water = ###
TOTAL= #####
and then for rectangular pavers with a ratio of
⅗ x 2 bags of cement = *
⅗ x 4 brr of sand = **
⅗ x 2 jrr of water = ***
TOTAL = ****
Will my average cost be accurate and if it is accurate, is it acceptable in accounting
No, they will not be wrong, because you do have raw materials, as I showed in my table.
The answer to all your questions is yes. And understand that your first TOTAL is 2 and the second TOTAL is 3, based on your example.
You do not even need to do the math yourself. Manager will do it for you. See https://www.manager.io/guides/18222.
This scenario tried to match my situation though it has a WIP product (which I didn’t understand🙈) and also my scenario is that 2 products are are produced at once and all share the same bill of materials yet they are recorded as separate inventory items with different average costs
@Joel_Aldrine, just to be clear, @Ealfardan was not saying that all three scenarios apply to your situation, but only that there are multiple scenarios where more than one finished inventory item results from a production sequence.
In the example we have been discussing, only scenario B applies.
Think of it this way: you have two separate production processes. They just happen to use the same raw materials and always happen at the same time.
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As accurate as your bills of materials.
Just BTW, since both products use the exact mix, why not allocate based on finished product weight. That would be as accurate as practically possible.
That’s absolutely true without a doubt…
That’s one reason am not giving up on Manager 
That sounds interesting but complicated…how do I do that? You mind being more eleborate
Since your bricks are of uniform size (hopefully 
) you can get a good estimate of the average weight of each piece.
Say the average T paver weighs 2 kg and the average regular paver weighs 1 kg. And since they both use the exact same mix, this also means that the T paver should always consume twice as much material as the regular one.
Let’s use the regular paver as your standard unit. This means that a T paver = 2 standard units.
Now suppose you produced 30 pieces of T and 40 pieces of regular. Convert your T pavers to std units (30x2 = 60) which gives a total output of 100 std units.
Allocate 60% (60/100) of your BOM to your T pavers; and
Allocate 40% (40/100) to your regular pavers.
This way if you encounter a problem with your raw materials or processing that mess up the yield and you get a different finished product mix (say you expected 30 T + 40 R but got only 10 T and 20 R) this will make sure to distribute the variances proportional to actual consumption.
In this case your allocation should be 50:50 (20/40):(20/40) but if you use fixed percentages you will never capture that.
Look @Ealfardan am dealing with tens of thousands of these pavers and its rather hard if not impossible to count individual units say T pavers alone and regular pavers alone…but what I know I produce 2 T pavers and 3 regular pavers at once but I always get the total number of wooden boards used where each board contains 5 pavers …so is it possible to use the percentage (or fractional) method you described above
Now this is perfectly elaborate 
Seems to me that tomorrow I’m gonna have a busy Mathematics day:rofl:
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Ok, that explains a lot.
Sure, since your output mix is always the same then calculating the percentage is a one time exercise. Just set it and forget it.
Thank you @Ealfardan and @Tut for all your efforts…I highly appreciate and value them…thank you once again…been truely helpful 
Same challenge here. We are Milling maize and have about 25% of a by product and 75% of a main product.
Now to allocate the correct quantity of raw materials to the two products is just guess work. I don’t know how the software would allocate the raw materials to the two outputs, since one of them is way more valuable than the other, but it would be good to have a good solution for this. For now am just reducing the raw materials for the main product by 10% and use that 10% for the by product.
But I recall 
by-products have no bill of materials since or if no resources are directly allocated to them just as @Ealfardan mentioned earlier…so what you should do is to create two production orders where you allocate all the resources to the main product in the first prod. Order just as you’d create any other production order…then create another production order for your by-product and allocate no bill of materials but remember to fill in the quantity of by-product…that should help you have accurate average costs without “guessing”
Just to be more clear…bill of materials is simply what you call raw materials 