Current production only allows one item to be produced. For example, say we have produced 200 liters of distilled rose water(main product) and got 200ml aromatic rose oil as a by-product using 50kg of rosebuds in total.
How can do I enter the byproduct into inventory?. and how to calculate the cost?
Yes, but are there any workarounds till those features get implemented?
Your only workaround at present is to create two production orders, one for the rose water and one for rose oil. The total amount of rosebuds should equal the amount used (50 kg in your example).
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After studying the our production process, It turned out the secondary product (rose oil) doesn’t cost anything extra it just appears on the surface of the rose water. So I made a supplier and named it Secondary product and made purchases invoices with item prices set to zero.
should I change my method to yours or my method is fine for now ?
I believe you should adopt the method of two production orders. Imagine a tax auditor looking at your records. You would have a hard time explaining an imaginary supplier and purchase invoices with no corresponding incoming sales invoices from suppliers. You could be suspected of falsifying tax records, etc. You will also end up with endless purchase invoices that are never closed by payments, even though their value would be zero. Why fake anything when a straightforward method is already available?
Alright I understand but how should I enter the second production order assuming it’s secondary I don’t want it to alter the main product cost?
I’m thinking:
1st production order: 50kg of rosebuds > 200 liters of distilled rose water
2nd production order: 0.00001 kg of rosebuds > 200ml aromatic rose oil
It would help if you had given real figures and included all ingredients because it is impossible to get 4 liters of rose water from 1 kg of rosebuds, you will at least also have added water, you may also have used energy for distilling, etc… However for example calculation purposes this is not a problem.
You just need to calculate the proportion of aromatic rose oil and of distilled rosewater per kg rosebud. From your example:
1kg rosebud = 4000ml (4 liters) rose water + 4ml rose oil. The proportion is thus 4/4000 = 0.001
So:
1st production order: (1-0.001) * 50 = 49.95 kg rosebud > 200 liters of distilled rose water
2nd production order: 50-49.95 = 0.05 kg rosebud > 200 ml aromatic rose oil
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I wanted to simplify the issue surely there are other ingredients. I will reverse what I have done and use your method thanks mate.