Instead of entering and “Completing” the job quantity, our production team just closes the job. It appears that WIP is relieved @ the standard cost at the original job qty, and then posts the difference of the material issued, at the standard cost to the job variance account.
If they would actually enter the completed qty for the job, would the amount that posts to the job variance account then be the difference between the actual and estimated materials from the production detail report and agree with the report?
Are they issuing the material?
When the job is received to where it is going it will relieve WIP at the standard cost. Any variance in that will get credited or debited to the variance account. If they are not completing the job qty that likely means they are not marking all ops complete and issuing all materials complete. The completed qty comes from the last operation quantity and determines what was completed through the process.
They’re issuing some materials, not all. Just closing the jobs because they “know” the job is complete.
I’m mostly trying to figure out why the difference between the estimated and actual on the Production detail report is different than the amount posting to the job variance account. I guess the job variance accout is using the standard cost, Not the estimated?
That standard and the estimated should be the same, if they are not then you should perform a cost rollup. The variance is the difference between the costing method cost and the WIP dollars. the estimate is a dynamic whereas the standard is static until you do a cost rollup.
Thanks for the info!