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Evo-ERP and DBA Classic >> Manufacturing >> Items in Net WIP
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Message started by kerric on 05/05/03 at 13:25:57

Title: Items in Net WIP
Post by kerric on 05/05/03 at 13:25:57

Our (JC-M) WIP Summary shows several work order items in Net that have already shipped. What would cause a net item here?
I tried printing the JC-C thru JC-F reports, but they equal the actual column. I'd like to know where to identify the items that didn't come out through Enter Finished Production (I'm thinking that is where it went wrong somehow). Our purchasing/inventory manager can't find where to identify that net $$ either.

We'd like to identify those because there are several and we need to know how to fix them; ie. remove them from WIP. Then going forward we can just prove the WIP Summary with outstanding jobs and GL.

Title: Re: Items in Net WIP
Post by Lynn_Pantic on 05/05/03 at 15:30:14

Run JC-Q for the subject work orders to determine if Enter Finished Production was done at all - it may have been done but for some reason at $0 so the parts came out of WIP but no costs.

Title: Re: Items in Net WIP
Post by Karen Mason on 05/05/03 at 15:36:10

The net wip is a result of the actual total ( the column in JC-M with the + sign over it) less Fin Prod. & Wip Variance (the columns with the -minus signs).

When you enter finished production, you may not always have all the costs in, or you may be using standard costs, or your best guess as to what the cost will be, or you may have only a partial going into finished production. All of these items will affect the fin. productin, variance, and ultimately the net wip amount.

The Work orders still need closed through WO-J. Once you close them, the net wip amount will move into the variance column. Then the net wip will = 0.

Title: Re: Items in Net WIP
Post by kerric on 05/06/03 at 06:14:10

Thank you. Your help is appreciated :D

One concern we had with closing work orders is the inability to look at some historical data once the work order is closed. At what point do you recommend closing the work orders?

Title: Re: Items in Net WIP
Post by kerric on 05/06/03 at 07:29:16

I have an updated question to this subject. Since your helpful answers, I did some sleuthing and discovered that labor was entered (for the exact $amt in Net WIP) two weeks after the ship date.

Since this WIP amt was not recognized in COS at the time of sale, would the correcting entry be to cr WIP and dr COS?

Thank you. You are all most helpful.

Title: Re: Items in Net WIP
Post by kerric on 05/06/03 at 07:36:05

Ok, I'm learning as I go. You definitely started me in the right direction :D

When I closed the WO in question, DBA automatically credited WIP for that amount and put it to WO variance. Should that be the entry that I adjust to COS?

Title: Re: Items in Net WIP
Post by Karen Mason on 05/06/03 at 07:40:20

That would be the manual entry yes.
However, what happens when you close the work order and there are costs still in it? There is a sheet that prints out regarding the adjustment. Is that transaction made automatically, or does a journal entry need made?

Also, to make sure last cost is correct for the part, I sometimes go into inventory and change last cost to the correct amount-even if there are zero on hand. That way, I know what the last cost was when I run the job again. Am I messing anything up?

Title: Re: Items in Net WIP
Post by kerric on 05/06/03 at 08:02:28

Well DBA made an entry to cr WIP and dr WO Variance automatically for that outstanding amt. I will then take it from WO Variance to the correct COS account (right?)

If the variance amount was for materials, what you said makes perfect sense to me (finally! ;D) but it was actually labor. So no, you definitely didn't mess it up.

You really helped me put some pieces into our puzzle!
Thank you.

Title: Re: Items in Net WIP
Post by Lynn_Pantic on 05/06/03 at 08:22:14

When you close the WO, the posting to WIP Variance happens automatically. The WIP Variance account should already be an expense account in the COS section of the income statement so you don't need to make any manual adjustment although some people do to keep all the COS in a single account. That is strictly a matter of preference. DBA posts all Cost of Sales as a single posting when invoices are posted and it does not break it down between materials, labor, etc. If you want the separate categories itemized on the income statement, you need to make a journal entry.

As for changing the Last Cost using IN-K, that is only a reference so you are not "messing anything up" by doing that.

Title: Re: Items in Net WIP
Post by kerric on 05/06/03 at 09:06:57

Thank you folks. Your replies helped us a great deal. Have a great day.