Accounting and Localization mailing list archives


production operation value on inventory

Mohamed Hagag
- 11.01.2017 14:07:56

Hi all,

I would like to know how to add the production operation cost on inventory value.

For ex.

Product P1 consists of Raw materials R1 + R2 and Operation O1

R1 cost = 1

R2 cost= 1

O1 cost per P1 unit = 1

in this case the system will credit raw inventory by 2 & dr. WIP inventory by 2 -- this is ok

then it will cr. WIP inventory by 3 adding O1 cost and dr. final product inventory by 3 leaving WIP inventory account with minus ( in this case -1 ) balance .

So what's the best way to process this operation cost on inventory value ?