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Suggested answer

MO Receipt Entry - Use all material issued to WIP

Posted on by 1,320

Hi all,

On the Manufacturing Order Receipt Entry screen when closing a manufacturing order, I think I closed it without checking off "Use all material issued to WIP". I check this off on every order. The reason I think I did not is because, in January, I have a closed MO and it looks like the margin is incredibly high on the item. After drilling into several manufacturing orders for this part around the timeframe in question I see that on the ones that are at appropriate margin the receipt components were  consumed. On the incorrect MO it shows no components were consumed. All are zero. Could this be becasue I did not check off the WIP box? If so, can this be fixed?

  • TCCAnalyst Profile Picture
    TCCAnalyst 1,320 on at
    RE: MO Receipt Entry - Use all material issued to WIP

    Disregard. I figured it out. Thanks again for your help Richard!

  • TCCAnalyst Profile Picture
    TCCAnalyst 1,320 on at
    RE: MO Receipt Entry - Use all material issued to WIP

    Quick question. You said I can set this to default checking that box off. Can you please tell me where I can find the setup window? Thanks in advance!

  • TCCAnalyst Profile Picture
    TCCAnalyst 1,320 on at
    RE: MO Receipt Entry - Use all material issued to WIP

    I will review your website. I appreciate the info and will pay more attention to this in the future. You have been great Richard! Thank you

  • Suggested answer
    Richard Whaley Profile Picture
    Richard Whaley 25,195 on at
    RE: MO Receipt Entry - Use all material issued to WIP

    What Valuation Method are you using for the finished items?

    You should have pulled costs from WIP equal to the expected cost of the item (depending on the Valuation Method) with overages or shortages poste to Variances.  If you have no costs at all for the items, you can use the adjust cost transaction to value the items in the MO receipt and take the offset from WIP.

  • TCCAnalyst Profile Picture
    TCCAnalyst 1,320 on at
    RE: MO Receipt Entry - Use all material issued to WIP

    I enter the MO's and they go to complete status. I review them and then close them out in a batch on the edit MO status screen. I am thinking we can do a journal entry to offset the error as I can't get back into the order. As I never used all material issued to WIP the leftover costs that were pending went to a variance so it looks like this order cost us nothing to make as far as material goes. Is this accurate?

  • Suggested answer
    Richard Whaley Profile Picture
    Richard Whaley 25,195 on at
    RE: MO Receipt Entry - Use all material issued to WIP

    I believe you can set the defaults for MO Receipts in the MO Setup window.

    This option, to take all costs or not, allows shops to issue everything to WIP and then record multiple MO Receipts.  If you are using Perpetual or Average costing, you do not want all of the costs included in the first receipt but you will want it in the last receipt.  When you do not take all costs in WIP on an MO receipt, it takes the expected costs for the quantity received out of WIP, leaving the rest for later receipts.  If additional items were issued due to errors in production or less items were issued due to errors on the BOMs, some firms want these values posted to Variances to expose the issus.

    We have a book on Manufacturing Cost Accounting and another on Shop Operations, both of which talk about this flag from different perspectives (cost accounting vs operations).  You should check these out on our web site.

    Also, are you ultimately closing these MOs, allowing the left over costs to be pulled out of WIP?

  • TCCAnalyst Profile Picture
    TCCAnalyst 1,320 on at
    RE: MO Receipt Entry - Use all material issued to WIP

    Darn! I thought this might be the case. Is there an easy way I can explain what happened to the CFO? If he says he doesn't get what the system did how can I tell him? Also can I fix this on a closed MO?

  • Suggested answer
    Richard Whaley Profile Picture
    Richard Whaley 25,195 on at
    RE: MO Receipt Entry - Use all material issued to WIP

    Yes, it would be.  However, when you close the MO, all remaining costs in WIP will be removed and moved to the variance accounts.

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