# Is it possible to allocate costs among formula item, co-product and by-product per cost category?

Dear Experts,

As far as I tested, AX provides us settings to allocate total cost to each product in a formula.

But I wonder whether it has further settings to allocate only some specific costs to those co-products and by-products. Even for each cost, the allocation method and rate may be different.

Thanh you very much for all of your suggestion.

You have the costing sheet for indirects, you have the cost categories on the routing and you have the cost allocation on the formula, but that is all, I am not sure what else you are trying to achieve by cost category - do you have an example?

Hi AdamRoue. Let’s say I have a manufacturing process with 3 steps. To produce product A, I only need step 1 and 3. But I add step 2 to achieve product B from this process. So I want: the direct labor cost in step 2 go 100% for product B, all other costs from step 1-2 will be allocated at a defined rate (i.e: 70-30), and all costs in step 3 will go 100% for product A. Is is possible?

No I do not believe that is possible, but clearly the production of B in this instance is part of A, it is a By/Co or if it is independent it would be a separate order. In your example B is a product of making A, so the cost is A but the cost for B depends upon the configuration then of the cost allocation in the formula.

Thank you!
A and B shares the same materials and costs in step 1, so I could not separate order. But from step 2, they are independent in direct costs, so I could hardly use the cost allocation in the formula (it blurs all clear costs). My business process is not exceptional yet I tend to think AX could not provide a direct, systematic way to solve it. Maybe I have to manually allocate costs after the production finishes.

There is no direct labout cost of step 2 for product B, you are not making B, B is a consequence of making A. If you wanted B to be wholly direct labour it is an entity in its own right.

Anyway in my opinion there is no way in AX to allocate the direct costs of a routing step to a “By product”.