Not sure if I'm just not getting the point or there's a serious logic
problem in the way standard costing works in Vantage:
When we issue manufactured components onto a job, the full standard cost of
those components is debited to the WIP material account (same as it would
for a purchased material). However when we process manufacturing receipts
for the top level part, the WIP material account is only credited with the
material cost for that manufactured component, not the sub contract, labour
& burden costs. Hence we always have a Phantom WIP Purge Varaiance (gotta
love those babies).
An example may help clarify:
Component A has std. cost of 1.00 (material 0.75, sub contract 0.25)
Component B has std. cost of 1.50 (material 1.00, sub contract 0.50)
Top Level Part C has std. cost of 3.00 (material 1.75, sub contract 0.75,
labour 0.50)
The std. cost for material & sub contract for part C is derived solely from
the std cost roll up. The labour cost is from an assembly opn. for Part C.
A & B are issued - WIP material account is debited 2.50.
Manufacturing Receipt for Part C - WIP material account is credited 1.75,
WIP subcontract is credited 0.75
Job is closed, Phantom WIP Purge Variance - WIP material is credited 0.75,
WIP sub contract is debited 0.75
I have huge variances each month because of this (in this example it is just
coincidence the variance cancel out - in reality they don't)
I have spoken to Epicor & their suggestion is not to use the Rollup for Part
C, instead I should establish the standard cost via Cost Adjustment entry.
Alternatively, I could pull Components A & B as assemblies. I tried
structuring the BOM as Pull As Assembly but then on the job I entered a pull
quantity from inventory as in reality that is what we do.
Can anyone shed any light on this or maybe point out that I'm totally
missing the boat on this issue and educate me otherwise. Thanks.
Dawn Pacepavicius
Haun Drop Forge Co. Ltd
P.O. Box 98
300 Major Street
Welland, ON
L3B 5P2
T: 905.735.9660
F: 905.735.3501
[Non-text portions of this message have been removed]
problem in the way standard costing works in Vantage:
When we issue manufactured components onto a job, the full standard cost of
those components is debited to the WIP material account (same as it would
for a purchased material). However when we process manufacturing receipts
for the top level part, the WIP material account is only credited with the
material cost for that manufactured component, not the sub contract, labour
& burden costs. Hence we always have a Phantom WIP Purge Varaiance (gotta
love those babies).
An example may help clarify:
Component A has std. cost of 1.00 (material 0.75, sub contract 0.25)
Component B has std. cost of 1.50 (material 1.00, sub contract 0.50)
Top Level Part C has std. cost of 3.00 (material 1.75, sub contract 0.75,
labour 0.50)
The std. cost for material & sub contract for part C is derived solely from
the std cost roll up. The labour cost is from an assembly opn. for Part C.
A & B are issued - WIP material account is debited 2.50.
Manufacturing Receipt for Part C - WIP material account is credited 1.75,
WIP subcontract is credited 0.75
Job is closed, Phantom WIP Purge Variance - WIP material is credited 0.75,
WIP sub contract is debited 0.75
I have huge variances each month because of this (in this example it is just
coincidence the variance cancel out - in reality they don't)
I have spoken to Epicor & their suggestion is not to use the Rollup for Part
C, instead I should establish the standard cost via Cost Adjustment entry.
Alternatively, I could pull Components A & B as assemblies. I tried
structuring the BOM as Pull As Assembly but then on the job I entered a pull
quantity from inventory as in reality that is what we do.
Can anyone shed any light on this or maybe point out that I'm totally
missing the boat on this issue and educate me otherwise. Thanks.
Dawn Pacepavicius
Haun Drop Forge Co. Ltd
P.O. Box 98
300 Major Street
Welland, ON
L3B 5P2
T: 905.735.9660
F: 905.735.3501
[Non-text portions of this message have been removed]