This chapter contains these topics:
To understand what happens when completions are reported against co- and by-products
If you use the Manufacturing Accounting system in any special environment (using rate schedules or processes), there are differences in how the system calculates variances and creates journal entries. Actual cost is not supported for Process or Repetitive manufacturing.
Understanding manufacturing accounting in ERPx environments requires the following:
Understanding process industry accounting
The main difference between discrete manufacturing accounting and process manufacturing accounting is that with a process, completions are reported against the co- and by-products themselves and not against the parent process. You can set a processing option to allow completions of unplanned co- and by-products. Variances are still reported against the process.
Unaccounted units represent the quantities and dollar amounts of transactions that occur against a work order when you issue parts, or record labor or completions. You cannot view unaccounted units. They are stored by the system until you run the Journal Entries for Work in Process or Completions program. This program creates journal entries for the unaccounted units and then purges the unaccounted units.
In the process industry, unaccounted units are stored in the same tables as in the discrete industry. Unaccounted units are stored in the following tables:
|Work Order Master (F4801)||When you complete a work order or record scrap against a work order, unaccounted units are stored in the Work Order Master table.|
|Parts List (F3111)||When you issue material to a work order, unaccounted units are stored in the Parts List table.|
|Routing Instructions (F3112)||When you record hours against a work order, unaccounted units are stored in the Routing Instructions table.|
Variance Inquiry can display small engineering variances because the frozen amounts differ slightly from the current amounts. However, Journal Entries for Variances rounds the amounts, and no variances print on the report.
Amounts are calculated in the process industry as follows:
|Frozen amounts||Frozen amounts are based on the cost of the process, from the Cost Components table (F30026).|
|Actual amounts||The actual costs of the ingredients issued are added to calculate the actual A1 cost of the process.|
|Completed amounts||For each cost component, the completed costs of the co- and by-products are added to calculate the completed cost of the process for that cost component. For example, the completed B1 cost of all co- and by-products are added. Their sum is the completed B1 cost of the process.|