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Question

Can you use Equivalence in IFS Costing

  • January 17, 2025
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We’re working with a client in the Construction Materials sector. When carrying out Product costing on one of their main product lines, they use a concept the call “Equivalence”, under which for example, the standard product is an 8x8x12 block which has an equivalence value of 1 and a cost of $10, another version of the product is an 8x8x9 block which has an equivalence value of 0.75 and a cost of $7.50, and a third product will be an 8x8x15 block which has an equivalence value of 1.25 and a cost of $12.50.

We’re trying to find a way of representing this costing method in IFS but none of the standard models in the system appear able to support it, has anyone encountered anything similar previously and does anyone have any suggestions on how this can be approached 

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