We have an ongoing problem that we can’t seem to figure out. Bare with me as I try to explain.
We have a manufactured part that has 2 other manufactured parts that make up this part. Also, 2 materials that we provide. Think of it as a 3 staged PCB (Parts A,B = C)
Stage 1 - PO is created to purchase Part A. Manufacturing job is created for PO (subcontract). We send 2 materials to the vendor and then receive the finished product (Part A)
Once we receive Part A, it goes to ICI and the materials that we provided to the vendor are issued to the job. Then Part A goes into inventory and the job is closed
Stage 2
Part A goes through a process change only. No physical change.
A job is created to program the board. This job pulls Part A and when complete becomes Part B (serialized) which is a non-stock item. When the job is complete, Part B goes into inventory.
Stage 3
A job is created for Part C (This is a serialized part). The job pulls Part B.
Again, only a process change.
When the job is complete Part C goes into inventory and is an issued material only.
Part C is issued to a manufactured product approx 2 days before the ship day.
The issue we’re having is how the cost is divided.
The cost of the 2 materials that are used to create Part A as well as the cost of Part A itself, along with the cost of Part B is going to COS when ideally it should still be WIP.
Part C goes to WIP which it should. Problem is, the completed cost of Part C isn’t calculating the cost/mtls of Part A & B into the total cost of Part C
We want the cost of Part C to include Parts A & B as well as the 2 materials we provide.
Maybe A and B are standard-costed with no standard?
Or, if you want to keep rolling the costs forward, you wouldn’t receive the parts to inventory, you’d receive them to the next job. The screen is called Job Receipt to Job. And parts A and B need to be flagged as Last cost.
There was some thought that perhaps the problem was due to the serialization of B & C. We have other parts that are serialized with no issues, however, they are not parts with multiple sub parts.
I don’t think we’ve ever used JRTJ but I will give that a try in our TEST environment and see if the desired result happens.
You should look at Part Transaction History Tracker to see at what cost the parts are going to inventory. If they are received to inventory at zero, then you may be receiving the part before the job had costs on it.
Otherwise, it seems like tha math is pretty simple. The Job Costing Tech Ref says:
Yeah, wow. It’s got $14.94 per part going to variance (all material - no labor, etc.). And yet you have no transactions showing for the period of two days after MFG-STK and before MFG-VAR.
I thought maybe it’s labor, as that does not show in PTHT. And it says it’s all material.
Have you ran the Inventory-WIP Reconciliation Report for this job? Make sure to do it for posted AND unposted.
@A1234
The final product costing will be averaged out since the “Average costing” is used.
I believe if you enabled LOT track with LOT Average costing you will achieve your result.
We track if shipments are on time and such but no we don’t calculate labour, at least for this part.The finance department runs the Inventory WIP- Reconciliation Report every month. Found out this morning that they have it set to ‘Only unposted to GL’. For avg this should have the ‘both’ toggle selected correct?
Again, I’m out of my league with average costing, but yeah, why on earth would they not do both posted and unposted? It’s nice to catch mistakes before they happen, but for sure you’d want to catch them after they happen, too.
Upon further investigating, it seems that ‘Only unposted to GL’ is the way they were taught to do it and never really questioned it. Logically, it would make sense to account for both sides but I think it may have just been a simple misunderstanding of what each toggle does.
I created jobs and ran the part and sub parts in question through all the stages they would normally go through in ‘Test’, then had the finance dept run a WIP Rec with the ‘Both’ toggle selected.
It appears that everything is going to the appropriate accounts. Not changing anything in live just yet though. We are going to do a WIP Rec trying each toggle, then compare the reports to see the difference. If it’s the outcome we’re hoping for, it would be an easy fix to what seemed like a super complicated problem.
