We've seemed to created a monster with our warranty order procedure.  
 
Purchased parts have not been a problem as our accounting department does a manual adjustment for the cost from our parts sales account to the warranty account.  We're having trouble with manufactured parts as our plant manager does not want the overhead dollars included in the labor amount.
I'm curious as to how others handle warranty orders?

We have a warranty part number, "warranty order"
with a blank description that we fill with part number/description of item returned for warranty work.  Since our FG require a serial number, the warranty order does also, and we can keep track of a given serial number by adding to the original a -1 or whatever.  This part number has a class code that has the same GL expense account for asset, COGS, and WIP,
We create a sales order for warranty order with $0 price. It's converted to a Indirect work order so that it doesn't show up in WIP Summary while it is expensed to a warranty expense account.  We issue labor and materials to the work order and collect the cost that way. You can even create a warrranty work center and only have direct labor cost and no overhead $$ for that work center.
This works for us because we don't (fortunately!) get too much warranty work.  
We do a similar thing for repairs.  But since we charge for them we collect costs as we would a normal FG.
 
Hope this helps alittle.

Yes, we are excited about this module, just haven't had a chance with end of year stuff to really figure out how we will use it.  But we plan to!

Thanks everyone for your input.  I will bring your ideas to our meeting at the end of the week.  Hopefully we can come to some sort of agreement without any punches being pulled!!
 
Weather in Carthage (today) is 45 (very unusual), but we'll take it     What a small world!
 
Thanks again!