WIP Calculation

My agency Controller is trying to figure out some things on the WIP report and is wondering if anyone knows exactly what logic Epicor uses when relieving costs from WIP.

Say for example a job has 5 operations. The order is for 100, 10 are finished and 30 are currently in process. How does Epicor know exactly what costs connect to the 10 that move from WIP to Finished Goods?

She has looked at the documents on EpicWeb and says they are not helpful for what she is looking for. She generally just wants to understand the flow so she can pinpoint process issues going on in our manufacturing area.

There are system settings to factor in.

Std costing? Or something else?

Being received into inventory or being shipped right from the job?

All time and quantity operations? Or is back flush labor involved?


Understand your dilemma …and BRAD raises valid questions!

My question to you, How does EPICOR know what the fractional costs (per unit) are based on trans reported per all operations?
Did the transaction of qty off the job occur prior to all required trans being reported? Even with MES… may not be so!
I’ve seen MFG-CUS shipments of your 10 units go out on FED-EX and minimal MES trans reflect cost/activities.

Std-Costing is a valid consideration here! Why?
Because Epicor would MFG-STK or MFG-CUS at the standard cost.
The Cost on job (correct of incorrect) per unit would be offset by MFG-VAR…

Quite critical is having trans entered in a timely manner… especially when shipping from JOB!

Also think on this… you manufacture 90… but only expedite ship 10!
Trans reported are incomplete as to job-labor!

So… your job has x-number of OP’s (lets call it 6)
JOB is for 100… RUN a Prod-Det-Report (PDR) and est-unit-cost should match a Costed BOM-report (ignoring lot sizing. etc)
You complete qty 10 thru all 6 operations and 30 are still being made, being somewhere in the production process between op 10 and op 60.

PRESUMING all transactions are in the system (let’s call it the end of the day), you transact 10 off the JOB. Cud be an MFG-CUS or an MFG-STK
What is the cost method? AVG / LAST / STD / FIFO / LOT
It makes a difference…
How much cost was on the job?
Cost on the job = all raw-mtl-issued and the 10 completed thru all op’s and the 30… transacted to-some-point within production.
Per GL and Financials, you cud have only ONE WIP account, or a specific account for Mtl, Mtl-b, Burden, Labor, Sub-con, rounding (or some other mix).
When u transact the 10 off the job… how much cost goes?
Credit WIP and Debit either Inventory or COS.

Your answer lies in PART TRANSACTION table!
Look at the specific COST entries on the off-the-job move!
Does Epicor take 10% (10 of the 100 per job-qty) of costs at each operation?

Let’s toss in a monkey-wrench… you transact the 10 off the job… BEFORE LABOR transactions get updated! OUCH! figure that one out!
Then tomorrow the labor is up-to-date as you finish the 30!?

Think ahead… what happens when items 90-thru-100 get transacted!!!
Were the labor-entries completed (timely MES transactions)?
Or did the material handler move the qty’s before the MES transaction of labor entry!?

Std-cost MAKES SENSE!!!