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Hi all,
Thanks for your advise in advance..
I would like to confirm if -->
* COGS Machine is = Standard Overhead Cost
If it is the case..
* COGS Machine Fixed OH should be Standard Fixed Overhead Cost
& COGS Machine Var. OH should be Standard Variable Overhead Cost
Am I correct?
Please advise
Thank you & have a nice day
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Here you go Benson - this is from the GP help files. Hope it helps:
Overview of accounts
As you’re setting up manufacturing accounts for items or item classes, it’s helpful to understand how the accounts are used.
Material Overhead Applied accounts These are liability accounts. They are used only for standard cost bought items that have associated fixed or variable overhead costs. They are liability accounts and are credited when a purchase order is received. The credit balance must be offset when the bills for the associated overhead expenses are paid. These bills could include rent, purchase payroll, or depreciation for warehouse equipment.
Inventory accounts These are balance sheet accounts and have a debit balance. Their value is attributable to your overall inventory value. They are used for standard cost items where overhead is being tracked and calculated as a result of the overall cost of the finished good.
Cost Of Goods Sold (COGS) accounts These accounts are income statement accounts that are treated as an expense, and they have a debit balance. These accounts show the value of sold inventory. With standard costing you can separate the costs of material, labor, machine, and the various overhead amounts into buckets.
Work In Process (WIP) accounts These accounts are balance sheet accounts and have a debit balance. They show the value of work in progress. For manufacturers, the value of inventory can be broken into three components: raw materials, work in progress, and finished goods. WIP amounts typically reflect labor and machine time used to produce the finished good.
Variance accounts These accounts are expense accounts and appear on income statements. They have a debit balance. Variance accounts are used for standard cost items. You can use them to spot deviations between actual costs and standard costs. Variances can be used to pinpoint where materials, labor, machine costs, or overhead amounts were greater or less than expected.
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