Actual costing for receipt postings in manufacturing

Actual costing in Manufacturing takes place when the item's inventory valuation method defined in the Warehouse - Item (whwmd2510m000) details session is LIFO, FIFO, MAUC, or Lot control. In addition to this, the End Item Receipt Posting check box in the Shop Floor Control Parameters (tisfc0100s000) session must be selected.

Note

For information on how costing is performed if the End Item Receipt Posting check box is cleared, refer to FTP for receipt postings in manufacturing.

If you report a production order or a specific quantity on a production order completed, it may occur that not all costs are already booked. To prevent this you must define procedures that regulate the timely booking of costs so that you can use actual costing in a reliable way.

To handle partial deliveries using actual costing, LN uses correction factors to distribute the costs for the partial deliveries:

  • If you use actual costing, backflushing can be a factor of complication. All backflushing must be performed before an end-item is received in the end-item warehouse. If backflushing is not performed before the end-item is received in the warehouse, the costs of the backflushed hours or materials are not included in the end-item's cost price.

You can trigger the backflushing process by running the Report Orders Completed (tisfc0520m000) session. However, backflushing is then carried out after the production order is reported as complete. So, if you click Yes when this message is displayed:

Automatically confirm receipt when activating warehouse order inbound line?

Backflushing is carried out after completion of the items and receiving them in the warehouse, and costs are booked too late.

If you use actual costing and backflushing, LN has some built-in checks to minimize the risk of booking costs too late. For more information, refer to Actual costing and backflushing.

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