Production Transactions

Components reservation

During the release process, the components are given the reserved status. No associate transaction is generated by the Accounting System.

Work Order components issue

During a W.O. components issue toward the production shop floor, the following transactions are entered :

- the Inventory account [A3] (defined at the level of the Item Category page) is credited for the standard value of the receipt,

- the WIP account [A8] (defined at the level of the Item Category page) is debited for the standard value of the components issue. If this account belongs to a given cost center, the transaction is recorded either in the cost center corresponding to the production center (for which the components are issued) when the components are managed operation by operation, or otherwise in the cost center corresponding to the first work center of the routing.

Production reporting

The production reports, defining the hours really used for the operations, induce debit transactions for the WIP account [A8] (defined at the level of the Item Category page) for the standard value corresponding to the reporting. This value is computed as the used hours multiplied by the standard cost rate of the resources (machine, direct labor, setup labor) defined at the level of the cost center corresponding to the work center of the operation. If this account belongs to a cost center, the transaction is recorded in the cost center associated to the work center producing the operation of the routing.

Transfer to the following work center

The produced parts (“Quantity good”) are transferred to the next work center (according to the routing), except for the last operation of the routing. This induces two transactions :

- the WIP account [A8] of the cost center of the backward work center is credited for the standard value of the part,

- the WIP account [A8] of the cost center of the forward work center is debited for the standard value of the part.

Scrap reporting

When a production report is recorded in relation to some scrapped quantities in a work center, this induces two transactions:

- the WIP account [A8] of the cost center of the backward work center is credited for the standard value of the part,

- the Scrap Cost Account [A11] is credited for the value of the production scraps (valued via the work-in-process value). If this account belongs to a cost center, the transaction is recorded in the cost center associated to the work center where the scraps occurred.

W.O. receiving into warehouse

The W.O. receiving into warehouse induces the following transactions :

- the Inventory account [A3] (defined at the level of the Item Category page) is debited for the standard value of the issue,

- the WIP account [A8] of the cost center of the last work center (for the corresponding routing) is credited for the real value of the produced work order,

- the difference between the real production cost and the item standard cost is entered Variances/Std Cost Account [A10],

The differences have two causes:

- the real machine times or labor times (as reported) can be different from the standard times (used in the calculation of the standard costs),

- the work orders size can be different from the standard batch sizes taken into account in the standard cost calculations.