diff --git a/CHANGELOG b/CHANGELOG
index a611353c99..e4e20ef347 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -1,3 +1,4 @@
+* Allow lost_found as output of production
 * Keep cost of unused input products
 * Use the shipment assign wizard for production
 * Rename production state from cancel to cancelled
diff --git a/production.py b/production.py
index 3beebf3a0f..5c9fca5c2c 100644
--- a/production.py
+++ b/production.py
@@ -131,7 +131,10 @@ class Production(ShipmentAssignMixin, Workflow, ModelSQL, ModelView):
         domain=[
             ('shipment', '=', None),
             ('from_location', '=', Eval('location')),
-            ('to_location', 'child_of', [Eval('warehouse')], 'parent'),
+            ['OR',
+                ('to_location', 'child_of', [Eval('warehouse')], 'parent'),
+                ('to_location.waste_warehouses', '=', Eval('warehouse')),
+                ],
             ('company', '=', Eval('company', -1)),
             ],
         states={
@@ -545,6 +548,8 @@ class Production(ShipmentAssignMixin, Workflow, ModelSQL, ModelView):
                     Decimal(str(input_.internal_quantity)) * cost_price)
             outputs = []
             for output in production.outputs:
+                if output.to_location.type == 'lost_found':
+                    continue
                 product = output.product
                 if input_quantities.get(output.product):
                     cost_price = (
diff --git a/tests/scenario_production_waste.rst b/tests/scenario_production_waste.rst
new file mode 100644
index 0000000000..6973e559f2
--- /dev/null
+++ b/tests/scenario_production_waste.rst
@@ -0,0 +1,92 @@
+=========================
+Production Waste Scenario
+=========================
+
+Imports::
+
+    >>> from decimal import Decimal
+    >>> from proteus import Model, Wizard
+    >>> from trytond.tests.tools import activate_modules
+    >>> from trytond.modules.company.tests.tools import (
+    ...     create_company, get_company)
+
+Activate modules::
+
+    >>> config = activate_modules('production')
+
+Create company::
+
+    >>> _ = create_company()
+    >>> company = get_company()
+
+Create main product::
+
+    >>> ProductUom = Model.get('product.uom')
+    >>> unit, = ProductUom.find([('name', '=', 'Unit')])
+    >>> ProductTemplate = Model.get('product.template')
+
+    >>> template = ProductTemplate()
+    >>> template.name = 'product'
+    >>> template.default_uom = unit
+    >>> template.type = 'goods'
+    >>> template.producible = True
+    >>> template.list_price = Decimal(20)
+    >>> template.save()
+    >>> product, = template.products
+
+Create Component::
+
+    >>> template = ProductTemplate()
+    >>> template.name = 'component 1'
+    >>> template.default_uom = unit
+    >>> template.type = 'goods'
+    >>> template.list_price = Decimal(50)
+    >>> component, = template.products
+    >>> component.cost_price = Decimal(1)
+    >>> template.save()
+    >>> component, = template.products
+
+Configure locations::
+
+    >>> Location = Model.get('stock.location')
+    >>> lost_found_loc, = Location.find([('type', '=', 'lost_found')])
+    >>> warehouse_loc, = Location.find([('type', '=', 'warehouse')])
+    >>> warehouse_loc.waste_locations.append(lost_found_loc)
+    >>> warehouse_loc.save()
+
+Run the production::
+
+    >>> Production = Model.get('production')
+    >>> production = Production()
+    >>> input = production.inputs.new()
+    >>> input.quantity = 20.0
+    >>> input.product = component
+    >>> input.from_location = warehouse_loc.storage_location
+    >>> input.to_location = production.location
+    >>> production.click('wait')
+    >>> production.click('assign_force')
+    >>> production.click('run')
+
+Create outputs including waste products::
+
+    >>> output = production.outputs.new()
+    >>> output.quantity = 1.0
+    >>> output.product = product
+    >>> output.from_location = production.location
+    >>> output.to_location = warehouse_loc.storage_location
+    >>> output.unit_price = Decimal('0')
+    >>> waste_output = production.outputs.new()
+    >>> waste_output.quantity = 1.0
+    >>> waste_output.product = product
+    >>> waste_output.from_location = production.location
+    >>> waste_output.to_location = lost_found_loc
+    >>> production.click('done')
+    >>> production.cost
+    Decimal('20.0000')
+    >>> output, = [o for o in production.outputs
+    ...     if o.to_location.type != 'lost_found']
+    >>> output.unit_price
+    Decimal('20.0000')
+    >>> waste_output, = [o for o in production.outputs
+    ...     if o.to_location.type == 'lost_found']
+    >>> waste_output.unit_price
diff --git a/tests/test_production.py b/tests/test_production.py
index 74dac25af3..4e7af79f3d 100644
--- a/tests/test_production.py
+++ b/tests/test_production.py
@@ -67,4 +67,8 @@ def suite():
             tearDown=doctest_teardown, encoding='utf-8',
             checker=doctest_checker,
             optionflags=doctest.REPORT_ONLY_FIRST_FAILURE))
+    suite.addTests(doctest.DocFileSuite('scenario_production_waste.rst',
+            tearDown=doctest_teardown, encoding='utf-8',
+            checker=doctest_checker,
+            optionflags=doctest.REPORT_ONLY_FIRST_FAILURE))
     return suite