Microsoft Dynamics GP Manufacturing – Accounting Transactions Part II

In my previous post on Dynamics GP Manufacturing Accounting Transactions, I have explained about standard accounting entries generated from  Dynamics GP Manufacturing for Average Perpetual items.
Now I will extend the same exercise by some other setup options
Background/Setups:
The setup option considered for the accounting transactions example consists the followings

1.    Machine & Labor Marked Auto Back flush
2.    Inventory Items using “Periodic Valuation Method” ( FIFO OR LIFO )
      Standard costing ( Periodic Valuation) values inventory at a cost based on the standard cost assigned to an item, plus eight other factors:
      Inventory – Material Fixed Over Head ( FOH )
      Inventory – Material Variable Over Head ( VOH )
      Labor Cost
      Labor Fixed Over Head ( FOH )
      Labor Variable Over Head ( VOH )
      Machine Cost
      Machine Fixed Over Head (FOH )
      Machine Variable Over Head( VOH )

Summary:
There are three Main Transactions from manufacturing

1.    Component Transaction Entry ( Issuance Of Material )
2.    MO Receipts ( WIP )
3.    MO Receipts ( FG )

And One Additional Transaction

4.    MO Closing ( In Case Of Variance )

Details:
Here is the details about the above transaction types with respect to a standard process of MO

Step 1:   Bill Of Material Setup
a.    No Accounting Transaction
Step 2:   Manufacturing Order Creation
b.    No accounting transaction
Step 3:   Component Transaction Entry ( Issuance Of Material )
a)    Issuance Entry
Account
Debit
Credit
Inventory           
Inventory- Material FOH
Inventory- Material VOH
WIP- Material              
WIP- Material – FOH
WIP- Material – VOH 
b)    Reverse Issuance
Account
Debit
Credit
Inventory           
Inventory- Material FOH
Inventory- Material VOH
WIP- Material              
WIP- Material – FOH
WIP- Material – VOH 
Step 3:   MO Receipt
a)    WIP For Machine & Labor
Account
Debit
Credit
WIP-Labor                    
WIP-Labor-FOH           
WIP-Labor-VOH           
Applied-Labor
Applied-Labor-FOH
Applied-Labor-VOH
WIP-Machine               
WIP-Machine-FOH      
WIP-Machine-VOH     
Applied-Machine
Applied-Machine – FOH
Applied-Machine – VOH
b)    FG Entry
Account
Debit
Credit
WIP-Labor          
WIP-Labor-FOH
WIP-Labor-VOH
Inventory-Labor
Inventory-Labor-FOH
Inventory-Labor-VOH
WIP-Machine          
WIP-Machine-FOH    
WIP-Machine-VOH
Inventory-Machine
Inventory-Machine-FOH
Inventory-Machine-VOH
WIP – Material
WIP – Material FOH
WIP – Material VOH
FG-Inventory
FG-Inventory FOH
FG-Inventory VOH
Step 4:   MO Close ( In Case Of Variance & its depend the type of variance as well)
Account
Debit
Credit
WIP-Labor          
WIP-Labor-FOH
WIP-Labor-VOH
Variance -Labor
Variance -Labor-FOH
Variance -Labor-VOH
WIP-Machine          
WIP-Machine-FOH    
WIP-Machine-VOH
Variance -Machine
Variance -Machine-FOH
Variance -Machine-VOH
WIP – Material
WIP – Material FOH
WIP – Material VOH
Variance – Material
Variance – Material FOH
Variance – Material VOH
Inventory Cost & Sales For Periodic Valued Items:
For Periodic Valued items, system maintain inventory cost in nine main buckets
      Inventory – FG
      Inventory – FG FOH
      Inventory – FG VOH
      Inventory – Labor
      Inventory – Labor FOH
      Inventory – Labor VOH
      Inventory – Machine
      Inventory – Machine FOH
      Inventory – Machine VOH
       
So when you prepare sales for Periodic valuation method finished goods, system will record the sales (COGS) in the following detailed manner
Account
Debit
Credit
Sales
Accounts Receivables
Inventory
Inventory – FOH
Inventory – VOH
Inventory Labor
Inventory – Labor- FOH
Inventory – Labor- VOH
Inventory Machine
Inventory – Machine- FOH
Inventory – Machine- VOH
COGS-Material
COGS-Material – FOH
COGS-Material – VOH
COGS-Labor
COGS-Labor – FOH
COGS-Labor – VOH
COGS-Machine
COGS-Machine – FOH
COGS-Machine – VOH

I hope this gives a detailed idea about manufacturing transactions with respect to periodic valuation.

Related Reference Links:
Dynamics GP – Manufacturing Accounts
Dynamics GP Manufacturing – Accounting Transaction Part I

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Microsoft Dynamics GP Manufacturing – Accounting Transactions Part II

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December 27, 2009 ·  · No Comments
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