Sunday, December 27, 2009

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.
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