End of Period Costing
Use the End of Period Costing activity to reconcile work center costs in earned hours and materials, comparing them to actual hours and materials posted against them.
When an item has predictable requirements for materials, labor and machine hours, you can establish typical or earned costs for manufacturing. The system bases costing variances on the difference between expected or earned costs and actual posted costs.
You choose the time period on which to base the comparison, such as daily, weekly or monthly. You accumulate material, labor and machine hours for work centers when you perform the following activities:
- Post Just-In-Time production
- Complete quantities for a production schedule
- Post work center transactions for labor, machine or materials