Product Cost Settlement/Adjustment

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In the production module, the system post following accounts when end the production order.

1. Issue
2. Issue offset account
3. Receipt
4. Receipt offset account

From my understanding, all the raw materials will be posted into "Issue" account, and all the finished product will be posted into "Receipt" account.

The point is the "Issue" and "Receipt" are not equal, cause the "Receipt" maybe posted base on the estimated/standard cost.

By the end of month, we will know the actual cost of production, which is consisted of "Materials", "Salary", "Machine" etc.

How to adjust cost for the finished product (just like we post the actual cost by invoice in purchase/sales process)?

Which inventory model should be used by the finished product ?

(AX 2012 R3)

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Guy Terry 28,924 Moderator on at

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Hi jianrui,

Receipt is posted as the works order is Ended, by which time all costs will have been assigned to the WO. Therefore, when you say the Receipt maybe posted based on the estimated cost do you refer to the fact that the cost of raw material items may change after a works order has ended (e.g. due to Inventory close)?

You also say Receipt maybe posted based on the standard cost. If the finished product is standard costed, then this is the cost that will always be used, regardless of the actual cost of production. If the raw material items are standard costed, then these costs will be fixed.

To get the finished product cost to adjust for actual costs, you must use an actual costing method (but not Moving average), and the Inventory close functionality.

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Hi Guy

For such cost like workers' salary, machine, etc are not involved in BOM item at the moment, we can know these cost at the end of month. That's why we have to adjust the cost of the BOM item.

Another thing want to confirm:

if i end the WO, all the material consumed by the order will be posted into "Issue" account, and the BOM item cost multiple to quantity finished will be posted into "Receipt" account ,right ?

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Weaveriski 23,620 Moderator on at

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I thought I had responded to it earlier. You should be building your cost into the BOM item, if you want to apportion this afterwards I presume this is purely to inflate the inventory value, in which case you would need to revalue during the inventory close every production receipt once you have worked out the cost of each machine and person and then apportioned it correctly to each receipt.

I would suggest you put in indirects into the costing sheet and set resources with rates to apportion. It does depend upon your costing method but you will get differences, but these are all accountable, and at the moment if you are not building real costs into AX you will have one heck of a task reworking them back in, but even if you were you estimate say electricity, when you get the bill in apportioning this to each finished product on an actual basis has no real value.

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