returns, and reworking rejected parts. The Stockroom prints discrete job material pick lists and picks material. The Stockroom issues material to the discrete jobs and material is moved to the shop floor. Production builds the product and moves the assembly in process from one operation to the next. Operation move transactions cause the Planner’s Workbench Discrete Jobs Issue Material Shop Floor/ Labor Close Job Complete Assys
Copyright © 1999 Margaret Coleman and Melanie J Bock earning of standard labor and overhead costs. Production reports WIP completions which moves the assembly into a stocking subinventory. Cost Accounting reviews completed discrete job material usage and routing standard variances, and subsequently closes the jobs. WIP Process Variations For some types of products you may use repetitive or flow manufacturing instead or in addition to discrete manufacturing. For other non-standard production such as product repair, teardown or engineering prototypes you can use non-standard jobs. Our company used a material push WIP supply type. You may chose to backflush material using assembly or operational pull WIP supply types. The Production department can scrap assemblies on the shop floor which charges the incremental assembly cost to a scrap account. If a product is partially built at outside suppliers you can track the items and cost through outside processing jobs and purchase orders. WIP Setup Major WIP setup considerations include the following: • At least one WIP accounting class is required for each type of job, standard discrete, asset non-standard, and expense non-standard. You may be use additional ones to segregate value and report on different types of WIP. WIP Accounting When you issue material to a job, WIP records the following entry: Account Calculation Dr Cr Dr WIP valuation 1 part x 100 material standard 100 Cr Inventory valuation 1 part x 100 material standard 100 As you perform shop floor moves, WIP records the following entry for earned labor and overhead: Account Calculation Dr Cr Dr WIP valuation 1 part x 20 earned resource and overhead standard 20 Cr Resource/overhead absorption 1 part x 20 earned resource and overhead standard 20 As you complete WIP jobs, the following entry adds the total standard cost of completed assemblies to inventory: Account Calculation Dr Cr Dr Inventory valuation 1 part x 130 assembly standard 130 Cr WIP valuation 1 part x 130 assembly standard 130 When you close discrete jobs, you record variances from standard as follows: Account Calculation Dr Cr Dr (or Cr) WIP valuation 1 part x (130 assembly std - 120 material+earned) 10 Cr (or Dr) WIP variance 1 part x (120 material+earned - 130 assembly std) 10
Copyright © 1999 Margaret Coleman and Melanie J Bock C5 Ship Product Shipping runs the pick release process which prints pick slips for sales orders scheduled to ship. The Finished Goods Stockroom picks and stages product for shipment. The Shipping department confirms shipments for each
Want to read all 34 pages?
You've reached the end of your free preview.
Want to read all 34 pages?