There is no output until the final routing step because the production order must go through all the required steps before producing the finished good. Only after completing all the steps—using all the raw materials and completing each routing step—can you output the finished product. It wouldn’t make sense to have a finished good without completing the entire process.
For example, imagine your production order is to bake a cake. The routing would include steps such as mixing the ingredients, assembling the cake, putting it in the oven, and baking it. Only after baking the cake (the final step) do you have a finished product. There is no finished output (the cake) at intermediate steps, like mixing the ingredients.
When the status of the production order changes from "Released" to "Finished," the system calculates the actual cost of the item. At this point, the cost is posted to the general ledger (G/L) in your inventory account. If you use standard costing, any variances are calculated at this step as well. Typically, you will have these 4 steps in a production order:
1. Posting of consumption of raw materials
2. Posting of output of operation capacities
3. Posting of output for the last operation -> the finished good is posted as output here.
4. Finishing the production order
