We had a bunch of jobs that were closed in our system that were not finished, but needed cleared. I am not sure what was done, but it looks like they checked the clear WIP and closed the jobs. Seems like this triggered a bunch of MFG - VAR transactions and the inventory does not seem to be in the system anymore. Just trying to figure out what causes a MFG - VAR transaction and if we can track where this was posted to the GL?
Was the job setup as backflush?
What costing method?
Was the job make to order, - to job, or -to stock?
Was the job’s prod Qty actually made?
We’re extra materials issued?
simply MFG-VAR is the STD COST difference between what you get out of WIP into INV and what you PUT into WIP
if you have a STD COST part at $10 - when you complete it from wip - it goes into INV at $10
if you put $0 into WIP then you just created $10 of profit from nothing. that’s MFG-VAR
theres much more discussion about how to address it.
Its a weird situation, the company went out of business and then started back up, jobs were in the system and were closed because they were no longer needed.
Most were started and never finished, so some parts were made and should have been scrapped but I am not sure if they were scrapped in the system.
Some ops are backflushed some are actually reported, setup is always backflushed
Costing method varies, usually standard
Jobs were make to order, some to stock
Prod qty was made for some parts, and some material was issued
not usually extra material issued.
us trying to figure out what causes a MFG - VAR transaction and if we can track where this was posted to the GL?"
If you closed out the job without transacting (MFG-STK, MFG-CUS, MFG-WIP) then you will created a MFG-VAR transaction because your actual cost on the job (all materials and labor reported) will be more than the std cost of transacted qty (mfg-stk, mfg-cus, mfg-wip) in your case would be 0 qty x std or avg cost = $0. This created the variance.
You could look for the GL acct by running the Inventory/WIP Reconciliation report choosing the filter “MFG-VAR” under the target transaction type list.
I forget - but does a MFG-VAR show the job number on the WIP Recon report?
If so run the WIP Recon for just that job, and expand the dates to the beginning of time to now.
I think you can filter on multiple jobs at the same time.
it looks like our WIP and Variance GL accounts were the same, so when the MFG-VAR was created, the GL did not actually do anything because they were both debit / Credit to the same account. That was why we could not see anything in the GL when the jobs were deleted.
that being said, when are the following used?
Variance Material Burden
Because they are set up the same way