If you set the SD-Q Setting NOT to include scrap in the cost of the good part what happens to the costs? It seems that they are accounted for in the G/L as if the costs were being absorbed by the good parts but the inventory value in IN-F doesn't change - this just causes a discrepancy between the G/L and inventory value - wouldn't a better solution be to expense those costs to a "scrap" account?
 
Any other thoughts?
 
Keith

Hi Lynn,
 
I think the problem with this lies in the IS TECH Mfg defaults - "Inc FP Scrap in cost of good part"
 
     Y= Hit's WIP variance A/C
     N= Hit's FG Inventory
 
I think they should be reversed.......