Actually, if your parts (being produced on the job) are Average or Last cost based:
Labor non-conformance source DMRs pull the estimated costs (up to the offending OP) of material & labor & subcontract OP into the DMR. The asset value of what is received from the job is reduced by that amount if the DMR is rejected (and depending upon your GL controls, determine where that DMR rejection cost goes in the GL).
It works very well if you also are set up to adjust job yield (qty) to reported losses. (Without the yield process, you end up with additional job completion/closing exceptions & WIP variances when WIP is cleared.)
Job material non-conformances are similar (but simpler) - cost of the material is pulled into the DMR as a reference & removed from the job to reduce the unit cost of the receipted qty’s.
Timing plays a role. (Wait too long and/or don’t yield adjust job qty’s and you can get odd results.)
I imagine Std basis parts being produced on a job would always hit inventory on receipt as that std unit cost & the DMR would simply be a vehicle to capture some of the variance (from standard) cost.
Our sold items (jobs linked to sales order line releases) are all standard & appear to behave this way (although it never hits inventory… It goes against Cost of Sales account.)