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5I was surprised that I couldn't find any posts on this so I think we must be doing something wrong!
We produce parts inhouse with Work Order to put into inventory and issue out to projects we are building and on sales orders. The system has three settings regarding overhead and ours is set to When Received because we want the overhead included in the cost of the part in inventory and the other two choices do not include it. When updating the costs of these parts, variable overhead is captured as a separate piece of the total cost. When I issue the part to a project, the variable overhead amount does not get split out but if the part is then returned back into inventory from the project, the overhead amount for the part goes to the clearing account instead of the manufacturing or expense account tied to that project and I have not found a mechanism in place to clear it out. I would like to know:
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Why the system would do this on the theory that if I understand why I'll know what we need to do.
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How can I prevent it from doing this?
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