Non Conformance?

We have jobs that the material is backflushed at the end .
What is the best process to record when a purchased part fails and needs to be replaced so it is trackable? I was researching the use of Non-Conformance transactions, was somewhat unclear of how that impacted inventory and costing of the job if any. Any G/L transaction created such as moving it from inventory to a dispositioning account of some sort?

non-conforming does NOT directly affect the GL…
here is the scenario:

  1. create job for 10 pieces… Estimated/Standard cost is $100 each
  2. issue all the material
  3. charge all the labor on all operations except the last one
  4. Complete the last operation, but Non-conform 1 unit, complete 9.
    AT THIS POINT, your job still “owns” the one unit… it is just in inspection. If inspection chooses, it can be returned back to the job, at which the job needs to “complete” it.
    BUT… if it is SCRAPPED, then it goes away. the COST is still in the job.
  5. Receive the 9 good parts to stock… the value of those 9 parts is:
  • if Standard cost: still $100 per part with a $100 variance charged
  • if Average cost: will be $110 per part (because you put 10 parts worth of work to get 9 parts out).
1 Like