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Evo-ERP and DBA Classic >> Manufacturing >> WO-I actual unit cost
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Message started by butchh on 07/02/03 at 09:42:40

Title: WO-I actual unit cost
Post by butchh on 07/02/03 at 09:42:40

We are in the process of converting over our inventory system to DBA. We have been running our old system parallel because the value balances in DBA do not match those in our old system. We know the old system has the right value because we have taken physical inventory. One of the question areas seems to be when we enter finished production. How is the actual unit cost calculated? It appears that until actual costs go in it uses the estimated costs from routings and bills of material to calculate the unit cost. And then on entry of the final quantity, the actual cost is used to do the final entry. But what happens in between when actual costs are beginning to accumulate? What is the formula used?

Title: Re: WO-I actual unit cost
Post by Lynn_Pantic on 07/02/03 at 11:17:03

If you respond N to use Standard Cost and N to "Is this the final quantity for this WO?" then the program uses a prorated calculation to calculate the cost. For BOM Components and Routing sequences that have had some time or material reported to them, the program projects the % complete to 100% and then divides that cost by the WO Quantity to get a unit cost contribution for the specific component or labor sequence. For any sequence or component that has had nothing reported against it, the program uses the estimated cost for that item to get its contribution.

If you have accurate standard costs, it may be better to use standard cost for partial receipts and then resolve the variance with the final receipt by responding Y to "Is this the final receipt?" or else use Standard Cost for all WO receipts and then when the WO is closed, any variance between the standard and actual costs will post to WIP Variance.

Title: Re: WO-I actual unit cost
Post by butchh on 07/03/03 at 09:44:27

Lynn. Our process for recording finished production and closing a work order is this. As items are finished, we record the quantities so that we can ship. When we complete the final quantity, we record the final production, but do not close the work order, because all costs may not be in. When we know those costs are in, we use the finished production screen to close the work order. The quantity completed at that point is zero. The difference between the actual costs and the previously recorded production goes to WIP variance. I have tried different combinations of answering the questions while closing the work order, but the only way to get that difference to go back to the item is to at the time of closing the work order, to put in a quantity of at least one. Is that true?

We want that actual costs go to the item.
(We are not using standard costs at this point.)

Title: Re: WO-I actual unit cost
Post by Lynn_Pantic on 07/04/03 at 18:30:56

You can't get costs into parts that have already shipped. That is why the WIP Variance logic exists for closing WO that get costs posted after the Finished Production is complete and parts have shipped.

Today's IS Tech Support (7/4/03) update introduces logic in WO-J Close Work Order that will post WIP Variance costs to the items in stock but only for the number of items that are still in on-hand stock. If the stock has shipped, the costs will still go to WIP Variance.

Title: Re: WO-I actual unit cost
Post by aricon on 07/05/03 at 09:11:43

Just to beat my own drum a bit...

I might add that the capability Lynn described in the latest update came courtesy of Aria Consulting and the requirements of my 35 user DBA client.

This was just one of MANY custom capabilities that we have had programmed for this client. These ARE available to others to purchase if they should so desire.

Title: Re: WO-I actual unit cost
Post by Juan on 07/08/03 at 06:19:00

We have a situation with the actual cost when closing a particular w/o. If we say yes to this is the last production entry the actual cost goes to $2K plus, if we say no, then the cost is $233. The original qty was for 300 pcs we have enter production 32 time, there's only 1 pc left to complete the w/o. All the other times when we had enter production the cost had stay around $233
Can you tell me what's going on?
Thx
JI

Title: Re: WO-I actual unit cost
Post by Lynn_Pantic on 07/08/03 at 08:50:31

Whan you answer Y to the question about "Is this the last receipt?", then all the costs entered into the WO less any prior finished production get assigned to this receipt. Sounds like all your prior receipts were slightly undercosted and when you add it all up, there is still $2K extra in the work order which all is being assigned to this receipt. If the WO is for 300 units and you have already taken out 299 @ $233 each, then the total WO cost must be about $71,700.