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Purchase Order Receipts - Phantom Purchase Orders
Purchase Order Receipts - Phantom Purchase Orders
An outside-processed operation may be cross-referenced to a "Phantom" purchase order which may be used to record the liability to the outside party. A receipt against the phantom order will generate a Quantity Complete transaction at that operation, which will be processed as described above.
1. Cost at Outside Process Workcenter is variable.
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50
|
units received
|
|
10.0000000
|
purchase order unit cost
|
|
12.0000000
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miscellaneous cost at workcenter
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|
DR
|
Accrued Miscellaneous Cost
|
600.00
|
|
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CR Purchase Price Variance
|
100.00
|
|
|
CR Accrued Purchase Receipts
|
500.00
|
2. Cost at Outside Process Workcenter is fixed.
|
125.0000000
|
purchase order cost
|
|
100.0000000
|
fixed miscellaneous cost at workcenter
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50 units received in Period 1. Period 1 journal entries:
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DR
|
Accrued Miscellaneous Cost
|
100.00
|
|
DR
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Purchase Price Variance
|
25.00
|
|
|
CR Accrued Purchase Receipts
|
125.00
|
The entire fixed cost is booked, regardless of the number of units received, as it is assumed that a fixed charge must be paid to the outside processor.
Period 2 activity for the same purchase order:
-20 units received on day 1
- 5 units reversed on day 2
No journal entries generated in Period 2 as the entire amount was booked in Period 1.
Period 3 activity for same purchase order:
The entire 65 units that were received in prior periods are reversed out of inventory, making the total quantity received against the order zero.
|
DR
|
Accrued Purchase
|
125.00
|
|
|
CR Accrued Miscellaneous Cost
|
100.00
|
|
|
CR Purchase Price Variance
|
25.00
|