Dear Sharvari
System calculates standard price based on costing lot size. Now suppose there is a FG which contains only one chemical. And the BOM is like 1000 Kg of FG requires 1 Kg of chemical. chemical cost is say Rs.5/- per Kg.
For a costing lot size 1 Kg of FG RM required is 1/1000 Kgs=.001 Kgs or 1 Gms. Cost will be .005. The system will ignore this cost as it is going to 3 decimal places. The same rule applies to activities also. To avoid this bigger lot size is preferred.
Also bigger lot size is useful to avoid rounding effects.
Ideally the costing lot size should be aligned with routing lot size.
Regards
Rajneesh Saxena
