Need help fro a bean counter please…
We use standard costing. We had a job close with zero standard cost and as a result, our WIP variance was $42,000. I believe a journal entry to correct this would be as follows:
Credit WIP Variance by 42,000
Debit WIP Mtl, Bur, Lbr and Subcontract according to the Actuals in the job cost.
Am I correct?
Wait for a proper accountant to reply as well, but my gut feel says no. A closed job is no longer in WIP, so that wouldn’t be the place to journal costs to.
Would it not be to STOCK or COST OF SALES?
A closed job remains in WIP until you Capture and Post. But because the Standard was zero, it didn’t hit the WIP accounts instead went to WIP Variance.