Entire Job cost going to variance

We are using standard cost. I have been approached by finance to figure our the reason the entire cost of a job goes to variance. My understanding is this would happen for two reasons. The first being that the the job was closed before any receipts were done. The second would be because the standard is at 0.

I came across 2 jobs. The first worked as expected but the cost on the part entry screen for standard was zero. the revision existed but had no material or operations. The job however did have operations and labor. The second job all cost went to variance but was setup the same.

The only conclusion I can draw is that they aren’t rolling the costs on the job. I spoke with the team that enters job details and they claim they do. How can I verify this for these jobs or future jobs? I am not sure what table holds the job rolled costs.

Thanks
Matt

Adding to a part’s MOM (materials or operations) won’t change the Std Cost until you do a cost roll-up.

As for the Job costs, its’ really a summary of PartTran records for the related job number. Sum up all the additions to WIP (STK-MTL, PUR-MTL, etc…) and subtract the reductions (MFG-STK, MFG-CUS, etc…) whatever is left in WIP when the job is closed, will create a MFG-VAR of that amount.

edit

I might not have been clear, but the cost used for the MFG-STK would be the Std Cost for the part.

Correct but only if you rolled it through costing workbench. Since the both parts had zero standard but one worked as expected the other didn’t it leads me to believe that there is something on the job level that they missed. These are jobs that are mfg-cus. All stock jobs are working as expected because MOMs are updated and costs rolled regularly.

Does an entry exist in the part table for the part made in each of the two jobs? Or was one an On The Fly part?

If both have part entries, are the settings for things like Qty Bearing and Non-Stock?

Both have Part Masters, Approved Revisions, and Empty MOM.

Identical flags on the part entries?

And a couple more things

  1. Run the Inv/WIP recon on those jobs, but for the System Date (it defaults to Tran date). I’ve seen users back date the material issues, or have done it right after the part was shipped / received.

  2. If the shipment was for less than the full production qty, and Qty Completed was not entered, I’ve seen the cost be zero. Then when the rest of the parts shipped, they were costed at the full value of WIP, divided by the qty of the final shipment.

I checked the parttran, labordtl table via script it appears they both have things that occur after shipment that cause a variance. On the shipment transaction though one has cost the other has zero which cannot be explained by late arriving cost. The one thing that appears to be different is the very last op on each job. one is the day of the shipment the other is the day after the shipment.

On the one with the Op that happened on the same day shipment, was the Op before or after the shipment?

Do you run Capture COS/WIP daily? Or any chance it was run after the shipment but before the Last Op was entered?

Thanks it appears to be when the final op is reported vs when the shipment occurs. I will track this through the end of the month and see what occurs. Thanks Calvin!

Calvin,

Old post, forgive me… I have a make to order job and all of the material cost hit the material variance account.

They never shipped against this job before completing/closing it, is that why it all hit the variance account?

-Utah

yes. Closing the job forces any remaining costs in WIP to go to a variance account.

If you have a finished item that accounting doesn’t want to “write off”, you could make a part entry (Qty Bearing), set its cost, and then do an inventory adjustment to put it in stock. Then have accting do a JE between the two variance accounts - one used on the the MFG VAR, and the other used by the QTY ADJ

Calvin,

Do all make to order jobs do the same thing?

I tried opening the job up and then shipping it off and re-closing it.

I then printed the inventory wip report again and nothing came up…

So shipping it off got it off the report BUT I was expecting it to be on the report because the material cost was more than what the standard says it should be…

Do make to order shipements/job costs not cause variances the same way ship from stock do?

Maybe it is just a timing thing I am running up against.

If I am not being clear let me know. Thanks for your feedback buddy!