Microsoft Dynamics GP Manufacturing – Accounting Transactions Part II

| 12/27/2009 | 0 Comments

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:

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Microsoft Dynamics GP Manufacturing – Accounting Transactions Part II

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