Accounting for material wastage

You have two options to handle material wastage. 

Firstly, you can include the wastage amount in your material usage for the manufacture itself so that this is factored into the material cost (i.e. if you have 50 sq inches of fabric used and 10 sq in scrap then you would create your manufacture to use 60 sq inches). 

Alternatively, you can create the manufacture with the exact amount of material used and then create an inventory adjustment to remove the extra amount in wastage - this method has the advantage of allowing you to categorise and report on your exact material wastage costs for any time period.

Details on how to add a material adjustment can be found here: How do I add a Material Inventory Adjustment?

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