Manufacturing Order Receipts

1. If the Shop Floor Control module is not installed, actual labor and machine hours cannot be recorded using the standard system. It is assumed that the standard labor and burden costs have been incurred when a receipt is performed.

1	unit received
15.0000000	total accounting cost per unit
9.0000000	material cost per unit
4.0000000	labor cost per unit
2.0000000	burden cost per unit

DR	Work In Process	6.00
	CR Labor Accrual	4.00
	CR Burden Accrual	2.00
DR	Inventory	15.00
	CR Work In Process	15.00

2. If the Shop Floor Control module is installed, the Manufacturing Order Receipt transaction affects the Inventory and Work In Process accounts only.

1	unit received
15.0000000	total accounting cost per unit
9.0000000	material cost per unit
4.0000000	labor cost per unit
2.0000000	burden cost per unit

DR	Inventory	15.00
	CR Work In Process	15.00

3. The manufactured part has a miscellaneous cost which is not associated with an outside process. An operation lead-time of zero indicates that the operation is not processed outside of the shop and represents an extraneous cost only. The miscellaneous cost is defined as a variable cost.

10	units received
16.0000000	total accounting cost per unit
9.0000000	material cost per unit
4.0000000	labor cost per unit
2.0000000	burden cost per unit
1.0000000	miscellaneous cost per unit

DR	Work In Process	10.00
	CR Accrued miscellaneous cost	10.00
DR	Inventory	160.00
	CR Work In Process	160.00

4. The manufactured part has a miscellaneous cost which is not associated with an outside process. An operation lead-time of zero indicates that the operation is not processed outside of the shop and represents an extraneous cost only. The miscellaneous cost is defined as a fixed cost.

10	units received
17.0000000	total accounting cost per unit
9.0000000	material cost per unit
4.0000000	labor cost per unit
2.0000000	burden cost per unit
200.0000000	fixed miscellaneous cost
100.00	average order quantity

The miscellaneous cost per unit is calculated as the fixed cost divided by the average order quantity (200.00/100 = 2.00).

DR	Work In Process	20.00
	CR Accrued miscellaneous cost	20.00
DR	Inventory	170.00
	CR Work In Process	170.00

Note: If a miscellaneous cost is defined as "fixed," it is assumed that the total amount is always incurred regardless of the quantity of the manufactured item that is actually completed. Thus, the total fixed cost will eventually be charged to work in process. When the order is closed, the amount that has been charged to date will be reconciled to the total fixed cost and an adjustment will be made to reflect the difference.

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Manufacturing Order Receipts