Sorry but I have no more advises as already posted.
I would not use a 262 if a material was already in production and comes back as scrap which is later given back to the vendor.
For me is a cancellation a correction of a posting error, if a material was used and comes back as scrap, then I would post this as receipt of a byproduct with a different material number.
And by-products are valuated with a standard price
This way you get smaller differences to a difference account, but the value cannot blow up like it is evident in your current setup