Set up production cost apportionment

Use the Production Cost Apportionment Setup page to ensure accurate and fair cost distribution across products, processes, or departments. Additionally, any changes that occur to the cost allocation method need to get your consensus.

1. Select the Search icon , enter Production Cost Apportionment Setup, and then choose the related link.

2. In the Calculation Unit of Measure Code field, select a code for the unit of measure that must be used when assessing the value attributed to each individual output item.
   > [!Note]
   > This value can be overridden at either the Item category or Item level.

3. In the Output Cost Method field, select either blank or By Factor.
   > [!Note]
   > Selecting the By Factor in the Output Cost Method field triggers the creation of additional entries that affect the cost apportionment. Otherwise, the system operates like standard Business Central.

   A prompt message appears and displays the following messages:

   Changing the Output Cost Method has a significant impact on a business's Item Cost reporting. To make the change, you must provide positive confirmation of your request.

4. Turn on the I Understand toggle.

   You will receive a confirmation message stating:

   Are you sure you want to change the Output Cost Method?

5. Choose Yes to accept the changes.

Production Cost Apportionment Setup Action

The following table provides descriptions of the actions on this page for the controls in this page.

Function	Description
Set Default value	Use this action to specify the production cost apportionment setup again and reset all basic setups to default values.
Check Setup	Use this action to see if there are any errors in the configuration. You can view any captured errors on the Error Message page and fix them as needed. This ensures a smooth configuration process without any issues.
Production Cost Apportionment Items	Use this action to configure alternatives and additional setup at the item or item category level, which overrides and enhances the Production Cost Apportionment Setup page settings.

Production Cost Apportionment Items

Once the Output Cost Method is set to By Factor, it is possible to configure on the item category or item level. You can also exclude particular items or item categories from the cost apportionment process, such as packaging items utilized in production. You can access the Production Cost Apportionment Items page by clicking the Production Cost Apportionment Items action on the Production Cost Apportionment Setup page.

On the Production Cost Apportionment Items page, fill in the required fields.

1. In the Source Type field, specify to which source type this production cost applies. The options are Item or Item Category.
   > [!NOTE]
   > The highest priority is given to the Item type.

2. In the Source Code field, specify the number or code of the source to which this production cost applies.

3. In the Calculation Unit of Measure Code field, specify a code for the unit of measure that will use this as the cost apportion UoM on the production line.

   When assigning factors to items (where factors indicate the item's significance in value apportionment relative to other items), the calculation unit of measure specifies the unit for weight consideration. Calculation units of measure defined at the item or item category code level take precedence over those from the Production Cost Apportionment Setup page.

4. In the Exclude from Apportionment checkbox, select this if you want to exclude an item or item category from the cost apportionment.

The Production Cost Apportion is set up.