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Evo-ERP and DBA Classic >> Problem Reports - Repeatable >> Negative dollar finished production entry
http://www.istechforum.com/YaBB.pl?num=1077639418

Message started by lmk223a on 02/24/04 at 08:16:58

Title: Negative dollar finished production entry
Post by lmk223a on 02/24/04 at 08:16:58

When last entry to finished production(calculated actual cost) from a work order results in a negative dollar costing posted to finished production, DBA is unable to pass this negative cost on when issuing these parts to another subassembly or when costing sales shipments DBA uses standard cost instead of calculated actual cost when posting these transactions as either an issued part to a subasy or when calculating Cost of Goods Sold for an invoice. This cost discrepancy is retained in DBA and is cleared by running UT-K-G to eliminate inventory values when 0 items remain in inventory.

Title: Re: Negative dollar finished production entry
Post by Lynn Pantic on 02/24/04 at 09:49:21

I can't duplicate this. If the final receipt from a work order results in a negative unit cost (as is possible if more cost was removed in prior receipts than was issued to the order) then the negative costed parts flow through the system either to higher level work orders or through invoicing at that negative cost.

If, when WO-I is performed with the negative cost, there are still parts in stock with a positive cost from a prior receipt, the costs will be averaged which can produce strange results. Invoice posting never uses standard cost, it always uses the average cost of the items in stock at the time of posting (or the LIFO/FIFO bucket cost if LIFO or FIFO costing is turned on).

If on-hand quantity (rather than cost) goes negative, then the Book Value can get out of synch with the on hand multiplied by average cost and requires UT-K-G to recalculate but this is by design, not a bug.

Title: Re: Negative dollar finished production entry
Post by lmk223a on 02/25/04 at 07:11:05

We have a work order for 1500 pcs: 1464 pcs are entered to finished production at std cost totatling $72,442.29. The last 36 pcs are entered to fin prod @ actual of ($5329.25) because total w/o actual costs are less than the std cost entries made to date.
We ship these last 36 pcs and DBA makes an entry to COGS at std cost rather than actual. Inv-A shows 0 pcs on hand, last cost to be ($148.03) per, and book value to be ($7057.19) which represents the ($5329.25) plus the std cost cogs entry of ($1,729.94). I use UT-K-G to correct this book value for 0 pcs to be $0. I use GL-P to make an adjusting entry to Sales Journal to correct overstated COGS so profit is properly reflected in General Ledger. However, when this situation occurs as a subasy, I am unable to correct the $ issuance of WORK ORDER ISSUE MATERIAL because I cannot force feed a $value. DBA issues material at std cost even though under FIFO the last entry was made at a negative dolllar amount.
I am waiting for my Information Systems person to assist me in sending you the DBA printouts displaying these problems.

Title: Re: Negative dollar finished production entry
Post by Lynn Pantic on 02/25/04 at 07:55:59

I didn't realize you were on FIFO, I was testing using Average Cost. If this happens a lot and is significant numbers, than it would appear your standards are inaccurate. You should review your standards and could also change procedures to always post WO-I at standard cost (even the final receipt) so you always have positive costs and then allow the difference to post to WIP Variance when closing the Work order which is an expense in the COGS section of the income statement so the financials will correctly reflect actual costs.