Hello all,
We have been generating some Variance transactions related to Jobs which pop up in transaction history. Can anyone give me any insight on what triggers these adjustments? These are not standard costed parts and no one is doing any manual adjustment. Any thoughts? Does this tie in with labor reporting somehow?
Thanks,
Alice
What is your costing method?
Last
the cost on the part is getting changed because of the MFG-STK transaction. It is getting changed to that cost of that job receipt. It changes the cost with a cost adjustment.
It could be that some fixed cost are are being re-distributed at each receipt.
If your job is to make 50, and there is a fixed cost associated with the job, and you do a partial receipt, it may not apply 1/50th of the fixed cost to each of the qty received into stock.
We used to see an issue where doing partial receipts (w/o entering qty completed), would go in at 0. Then the last receipt, would go in at the full cost of the job.
For example, if the full cost to make 10 of something was $12,000 , you’d expect each receipt to be $1,200 per qty received. But we’d see the following:
5 rcvd at $0.00 -> Inv val = 0, WIP value = $12,000
3 more rcvd at $0.00 -> Inv val = 0, WIP value = $12,000
last 2 rcvd at $6,000 each -> Inv val = $12,000, WIP value = $0
So if I understand correctly: Since we are using “last” costing, the part cost is being adjusted to match the “last” job receipt" cost?
Thank you, Thank is useful information. I will take a closer look.
Yes.
FTR - We use AVG costing, so we don’t generate ADJ-CST trans upon receipt. I just wanted to point out that the unit cost used during a partial receipt from a job is not always the total job cost divided by the qty to produce.
It would be very helpful to look at the MtlCost columns of the Part Tran History. If the cost is different for each MFG-STK tran, then its the cost being reported by the job that is varying. And since you’re using LAST, this new cost is different from the “current” last cost, so an adjustment is need to revalue the existing inventory.
Also FTR, you can generate ADJ-CST transactions with AVG costing. I believe it happens when you complete a job short of the full quantity. Initially it calculates unit cost by dividing by prod qty, then it recalculates based on completed qty.
