Bom costing
This query is : Resolved
11 July 2013
Dear CCI Members
During verification of BOM for cost audit i found that the company is including the consumables like cotton,oil,etc. in BOM.and showing it to the Material consumed in cost sheet.
In my opinion consumables should not form part of BOM.
can u kindly tell me whether the company can show consumables in BOM.
During verification of BOM for cost audit i found that the company is including the consumables like cotton,oil,etc. in BOM.and showing it to the Material consumed in cost sheet.
In my opinion consumables should not form part of BOM.
can u kindly tell me whether the company can show consumables in BOM.
CA Kumar Mukesh
(Expert)
11 July 2013
BOM means recipe requires to make finished product. it contains all material requires to convert raw material into finished product
For consumable items like oil cotton etc. as you mentioned, it depends upon discretion of Company whether its wants to add in BOM or not.
You may verify genuineness of BOM, by comparing actual consumption with BOM consumption for particular period for these consumables
BOM means recipe requires to make finished product. it contains all material requires to convert raw material into finished product
For consumable items like oil cotton etc. as you mentioned, it depends upon discretion of Company whether its wants to add in BOM or not.
You may verify genuineness of BOM, by comparing actual consumption with BOM consumption for particular period for these consumables
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11 July 2013
As they are showing BOM as a material consumption,that means it will go to direct material but consumables are indirect material.
CMA Ramesh Krishnan
(Expert)
11 July 2013
Refer the CAS- Material cost in case of any deviations in the treatment to correct.
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