Microsoft Dynamics 365 Supply Chain Management, Manufacturing — Question 30

You are the lead product design manager at a Process manufacturing plant.
You are building a formula that produces egg yolks as a by-product. This by-product is added back into inventory at standard cost and can be used in other production batches.
You need to select the by-product cost allocation.
Which cost allocation type should you use?

Answer options

• A. Per series
• B. Per quantity
• C. Recycled
• D. Percent

Correct answer: C

Explanation

The correct answer is 'Recycled' because this method effectively accounts for by-products that are reused in the production process, allowing for accurate cost tracking. The other options, such as 'Per series,' 'Per quantity,' and 'Percent,' do not specifically address the reallocation of costs related to by-products in the same way.