We have a scenario where we send raw material to our outside supplier to make a product, and we are trying to set the Inventory Part as Purchase part type, create product structure so that when we create the Purchase Order, we have the ability to ship the raw materials against the PO. When sending the components to the supplier, we usually send more than what is required to account for the loss of material during transit or some damages at the supplier location. When the material is received, we do sometimes receive the extra components back, or sometimes it is considered as scrap at the supplier. If the material is scrapped, during the PO receipt, is there an option to ‘Scrap Components’ against the PO?

Currently, any extra material we are sending on the PO is resulting in transaction posting as ‘M19 - Price Diff Purch’ posting type which is tied up to our material price variance account. We don’t want this to go to our variance account since in reality the material will be scrapped. We would like to route the extra components we send to the supplier to post to our scrap account. Is there a different posting type that can be fetched for this scenario so that we can route the posting type to a scrap account?

The goal is to tie the material cost, subcontracting cost, freight, scrap, etc., against the PO.