For most of our jobs rejected in-process, we just add a rework operation to
that same job just previous to the operation they were rejected on (in this
case inspection).
When adding the operation we usually check "added operation" so we can
easily see the costs broken out on the production detail report.
The quantity per parent for that operation is the number of parts needing
rework divided by the total number of parts on that job.
In the comment block, we reference the DR/DMR #. The DR/DMR paperwork that
goes with that job has a disposition section that spells out to the
operator how the rework is to be performed.
The good parts just stay at the inspection operation until the rest catch
up, or can continue on to finish the job and the reworked parts will
follow.
Once the rework operation is complete, the parts go back through the
inspection operation, where they are accepted or rejected. If they need
rework again, we add another operation between the 1st rework and the
inspection operation.
Since we use standard costing, the rework costs then go to variance, so it
is very clear which jobs deviated from the standard and bear further
investigation.
Amy O'Malley
Manufacturing Process Engineer
Synovis Interventional Solutions
8.00.804
omaLL004@...
that same job just previous to the operation they were rejected on (in this
case inspection).
When adding the operation we usually check "added operation" so we can
easily see the costs broken out on the production detail report.
The quantity per parent for that operation is the number of parts needing
rework divided by the total number of parts on that job.
In the comment block, we reference the DR/DMR #. The DR/DMR paperwork that
goes with that job has a disposition section that spells out to the
operator how the rework is to be performed.
The good parts just stay at the inspection operation until the rest catch
up, or can continue on to finish the job and the reworked parts will
follow.
Once the rework operation is complete, the parts go back through the
inspection operation, where they are accepted or rejected. If they need
rework again, we add another operation between the 1st rework and the
inspection operation.
Since we use standard costing, the rework costs then go to variance, so it
is very clear which jobs deviated from the standard and bear further
investigation.
Amy O'Malley
Manufacturing Process Engineer
Synovis Interventional Solutions
8.00.804
omaLL004@...
On 9 Jan 2006, Marilyn Fairchild wrote:
> Our CFO is asking how others handle rework. If a job is rejected in
> Inspection, before it is finished, then is that job put on hold, another
> started for the rework, then the first job finished after the rework job
> is done? The concern is how indirect costs are tracked. If a new job
> is started just for the rework then how do you keep that rework job from
> showing direct costs as a job? If the rework is done under the original
> job number, then the costs are skewed because of the rework. Granted,
> you want to track rework, but we want it to be tracked as an indirect
> cost rather than a direct cost. If we set up a rework job, costs can be
> tracked that way, but that requires a Journal Entry and we are looking
> for a better, less time consuming way.
>
> Thanks for any help.
>
> Marilyn Fairchild
> Systems Administrator
> Pickwick Manufacturing Services