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Re: Production Costing

El Aleman, David Arnold
- 08/21/2014 10:22:56
The easierst way to link both aproaches is analytics. Its very easy including project/analytic account link on mo and creating  new analytic lines on the moment you need. Services cost products are related to resources by default. We can reuse this concept.
​I'm not sure, if I was understood correctly with my concern. I reasonably (for legal reasons) want to be able to do the following:​
  1. Load costs onto a production account of the CoA when production starts
  2. Load costs (including attributable overheads) of half finished products or finished products onto an Asset/Inventory account (it doesn't matter here if the base information is actual or estimated, this is a question of the companie's flavor and their need for accuracy and their willingness to do the trade-off)
  3. When seeling load the cost to an expense account (this is already done by normal WH)
I did not understand right away, how/if this was possible with Analytic Accounts. The point is that services are not activated by default (-> analytic), "attributable" production costs are. I think one thing to help me to evaluate better your approach, would be to know what meta-concept are you using the analytic accounts for, as those can have a large variety of faces, as we know. It is definitively the right way to reuse ressources concept! (No matter if actual or estimated base) However, depending on your further arguments, at the moment I'm not convinced that bridging it via analytics is the way it should be done. I think of a lightweight ressource "accounting-sprinkler" as a reasonable ring of common abstraction (even before making data collection actual vs estimated/statistical).

I think for excellence sake, we should always consider the way it should be done. Because we all know, workarrounds, especially prominent ones, have hidden and almost not calulable lifetime costs onto the ecosystem.

As Ray's contribution revealed (which is also discussed in many Activity-Based-Costing discussions among CFOs) the question is if benefits of actual data collection are overruling it's tremendous costs (unless we have total autmation in some 20 years time) compared to the estimated/statistical base data collection. I think we should keep this in mind, that, conceptually, the former is an extension of the latter, not a compeeting concept. That's why in any development on this field IMO should be 2-stepped as well.

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