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Assign Standard Overhead Cost 's GL Account Number

Hi Richard,

Thanks for your help in advance..

Yes, we would like to use Standard Costing ; hence we are using FIFO Periodic Valuation Method.

I have come across the following questions:

1) There is a "Item Account Maintenance-Costing" screen, asking for GL account numbers for the "Variance labor, Variance Material, Variance Machine, WIP Material ,CoGs Material.."

Question.

1) What is the CoGS Material for? Is it for posting the Actual material usage during production?

2) I believe Applied Direct Labor (GL Account) that I saw in the "Standard Cost Changed/Maintanence" screen , is Standard Direct Labor Cost..... so.. how about

the CoGS Labor on the "Item Account-Maintenance -Costing" screen?

What is the difference between :

CoGS Labor Account on the Item Account Maintenance Costing Screen

Applied Direct Labor on the Routing /Rollup Screen?

Please advise..

Thank you

FYI...please respond to earlier posts rather than start new ones....I found you but we get emails when you respond to one of our replies.

Your questions are DEEP and hard to explain in a few hundred words. You need to get a consultant that knows Standard Cost and Manufacturing Cost Accounting to assist. But, here goes...

Raw materials are purchased to the inventory asset account (actually a material account) assigned to the item. Labor is expensed to a labor expense account and all the overhead expenses are charged to their various accounts. When an item is manufactured, costs are credited to the inventory asset accounts and labor absorption and overhead absorption accounts and held in one of 9 WIP accounts (Depending on whether the expense is material, labor, overhead., or machine costs) When a standard cost item is received from manufacturing to inventory, all nine (potentially) costs are relieved from WIP at standard and written to Inventory in 9 different buckets. When the MO is closed, any remaining dollars in WIP are moved to the appropriate 9 Variance accounts. When a manufactured item is sold, the dollars for the item in the 9 Inventory accounts are moved to the 9 COGS accounts.

Now, I don't have ANY customer that uses all 9 accounts. You need to work with a consultant to determine which of the accounts you will use and which will be ignored.

Again, there is a long and lengthy explanation of this in our Manufacturing Cost Accounting book.

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