Posting to General Ledger - Standard Costing

The standard costing system posts all transactions that affect the value of inventory to the GL inventory distribution journals. All transactions are processed using standard costs that have been established with variances being posted to a series of variance account numbers.

See Standard Costing: Transactions Posting to the Inventory Distribution Journals.

General Ledger Account Numbers Used

Before processing any transactions in the manufacturing modules you must set up the GL account numbers to use for posting to the inventory distribution journals. These account numbers can be found in the Product Codes, Departments, Purchasing Parameters, and Distribution Accounts forms.

The following list details the accounts you need to set up.

Product Codes - WIP:

WIP Material
WIP Labor
WIP Fixed Overhead
WIP Variable Overhead
WIP Outside

Product Codes - Miscellaneous:

Inventory Adjustment

Product Codes - Applied Overhead:

Material Fixed Overhead Applied
Material Variable Overhead Applied

Note: The Material Fixed Overhead Applied and the Material Variable Overhead Applied accounts are required only when basing overhead on job material issues.

Product Codes - Variance:

Purchase Cost
Material Usage
Routing

Product Codes - Labor Variance:

Labor Rate
Labor Usage

Product Codes - Overhead Variance:

Labor Fixed Overhead Usage
Labor Variable Overhead Usage
Material Fixed Overhead Usage
Material Variable Overhead Usage
Machine Fixed Overhead Usage
Machine Variable Overhead Usage

Note: The Material Fixed Overhead Usage and the Material Variable Overhead Usage accounts are required only when basing overhead on job material issues.

Purchasing Parameters
Vouchers Payable

Departments:

Direct Labor Applied Account
Fixed Overhead Applied Account
Variable Overhead Applied Account

Note: The Fixed Overhead Applied and the Variable Overhead Applied accounts are required only when basing overhead on job labor.

Although these rates default from this location, they are also maintainable at the Current Operations, Job Operations, and Estimate Operations forms.

Work Centers - Costing:

Fixed Machine Overhead Applied Account
Variable Machine Overhead Applied Account

Although these rates default from this location, they are also maintainable at the Current Operations, Job Operations, and Estimate Operations forms.

Distribution Accounts - Inventory:

Inventory
Inventory Labor
Inventory Fixed Overhead
Inventory Variable Overhead
Inventory Outside

Distribution Accounts - Sales/Cost of Goods Sold:

COGS Material
COGS Fixed Overhead
COGS Variable Overhead
COGS Outside

Distribution Accounts - In-Transit:

In-Transit Material
In-Transit Labor
In-Transit Fixed Overhead
In-Transit Variable Overhead
In-Transit Outside

Note: You are allowed to delete any distribution account record, including the default distribution account with a blank warehouse and blank product code.

The inventory account number used for journal transactions does not come directly from the Distribution Accounts form. Rather, the inventory accounts used comes from the stock location being accessed when the transaction is performed.

When a stock location is added for an item in the Inventory module, an inventory account is entered for the location, and an account number for each cost detail component is added.

The default for these fields are the inventory account numbers in the Distribution Accounts file to which the item belongs.

To locate the inventory account numbers, the system searches, in the following order, for:

An exact match for both the warehouse and the product code.
A match for the product code and a blank warehouse.
A match for the warehouse and a blank product code.

The system does not post to the G/L inventory distribution journals if any of the account numbers it is attempting to use are not set up.