FIFO Average problem which should be obvious but is not

We are seeing a method of manufacturing consistently underreport material costs.

I have all 100 pieces in the final operation, all operations are complete and since the material costs are $1337.72, each piece should be costed at 133.77, not 107.48! None were in stock when the transfer was made and I tranferred a second one which came out at the same cost. Anybody have any insights?

Have you looked at the detail on the Costs tab to see what that shows?

Hi @Doug.C , yes it all ties out on there as far as I can see

When I add up the STK-MTL they are definitely $1337.72. Maybe the Production Detail report, or the WIP report will show something?

Production detail agrees too. I just noticed my decimal was in the wrong spot, each unit should have been costed at 13.37 instead of 107. This is a big difference and I wonder if it’s a math error coming up somewhere? When I moved the last 98 the system properly calculated the cost and zeroed it all out. These jobs with stragglers are causing big problems.

I think it has to do with the timing/alignment of material issuance vs operation completion.

If you issue material for 5, then complete qty 1, I think Epicor considers the material cost for that first completed unit to be 5x the unit cost of the material. Then you if issue the remaining 95 material qty and complete the remaining 99 operation qty, the 95x material cost gets divided up amongst the 99 completed parts.

That is true FIFO. In the end it all balances out but the amount of material issued / the completed qty is taken in snapshots for lack of a better term.

(I may be way off base here but I have seen similar behavior here and if you walk back through the material issue and operation completion steps, it seems to work that way)

Thank you @andrew.johnson and @Doug.C

I found the solution for what I am seeing. The answer was in the Costing Techincal Reference:
β€œIssued Complete
Job costing logic for calculating the material usage for one of the related operation quantities considers the Issued Complete flag to determine if actual issued materials or the estimated required materials should be used in the calculation. If the materials are completely issued, then the material unit cost is proportionate to the actual issued materials. If the materials are not completely issued, then the material unit cost is proportionate to whichever is greater between the expected required materials and actual issued materials.”

So on the job materials list below, if I multiply mtl 100 cost of 192.04 by the remaining qty left to issue (98) and add it in, I get a job cost of 10747.68 which explains my unit price 107.48. It looks like parts which are completely un-issued do not get added to the cost.

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