Microsoft Dynamics 365 Supply Chain Management Functional Consultant Expert — Question 73

You are the lead product design manager at a Process manufacturing plant.

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. Percent
• C. Recycled
• D. Per quantity

Correct answer: A

Explanation

The correct answer is 'Per series' because this method is suitable for allocating costs associated with by-products that are produced in a series of production processes. The other options, such as 'Percent' and 'Per quantity', do not adequately address the specific cost allocation needs for by-products in a continuous manufacturing environment.