Another Material Adjustment Issue

I am having a difference of opinion with a collegue.

If you create a job for 10 parts, issue the material to the job normally, clock in to the 1st operation (which is a saw operation), clock out of the 1st operation, count the 10 parts, and mark the operation complete, and then discover that 3 of the parts were sawn too small to make the part. What would you do?

The material P/N is dimension tracked and lot tracked.

Problem: You want to put the material back in stock because you can make other parts out of it. But, you don't want to incur any scrap costs to this job.

The question: How do you do it? Material adjustment to the job? That seems to be what we've been doing.

My argument is that you can't do a material adjustment to the job because the material isn't material any more, It's WIP. I think that the 3 PARTS should be scrapped off of the job with a reason code pointed to a "temp" G/L account, then just adjust the material back into inventory with an adjustment reason code that debits the "temp" account and credits the inventory account. This would leave the burden/labor cost on the job but no scrap material cost, since we can use this material on another job and cost it to that job correctly.

Does anyone know of an easier way to do this?

Scott Hearn
Pro-Fab, Inc.

Do you Yahoo!?
Yahoo! Tax Center - forms, calculators, tips, and more

[Non-text portions of this message have been removed]