Production Processing: Generated Transactions
As you perform item production, you create and process a production order and the related transactions to track the movement of produced items and used components between a work center and a warehouse, to record item costs (such as labor, tools, and overhead), and to update the GL balances; details about the transactions are described in the following sections.
A Material Transaction and Related Transactions
You create a material transaction on the Materials (AM300000) form when you need to issue materials to produce items for a production order. When you release the material transaction, the system creates an inventory issue transaction on the Issues (IN302000) form and releases it; you can view the reference number of the issue in the IN Ref. Nbr. column of the Materials form. For the inventory issue transaction, the system generates a batch of the general ledger transactions shown in the following table.
| Account | Source of Account | Debit | Credit |
|---|---|---|---|
| Work in Process | The posting class settings on the Posting Classes (IN206000) form | Amount | 0.00 |
| Inventory Asset | The posting class settings on the Posting Classes form | 0.00 | Amount |
A Labor Transaction and Related Transactions
You create a labor transaction on the Labor (AM301000) form when you need to record direct labor costs (such as working hours spent for item production) and, optionally, the produced quantity of items or indirect labor costs. When you release the labor transaction that records direct or indirect labor costs, the system creates a cost transaction on the Cost Transactions (AM309000) form and releases it. For the cost transaction, the system generates a batch of the general ledger transactions shown in the following table.
| Account | Source of Account | Debit | Credit |
|---|---|---|---|
| Work in Process | Posting class settings on the Posting Classes (IN206000) form | Amount | 0.00 |
| Direct Labor (if direct labor is recorded) | Labor code settings on the Labor Codes (AM206500) form | 0.00 | Amount |
| Indirect Labor (if indirect labor is recorded) | Labor code settings on the Labor Codes form | 0.00 | Amount |
When you record both labor and the produced item quantity in the labor transaction, the system includes in the cost direct labor costs, indirect labor costs (if recorded), and other costs involved in item production, such as machine, tool, and overhead costs, which are specified on the Work Centers (AM207000) form. The batch of the general ledger transactions generated for the cost transaction may include the transactions listed in the following table.
| Account | Source of Account | Debit | Credit |
|---|---|---|---|
| Work in Process | Posting class settings on the Posting Classes form | Amount | 0.00 |
| Direct Labor | Labor code settings on the Labor Codes form | 0.00 | Amount |
| Indirect Labor | Labor code settings on the Labor Codes form | 0.00 | Amount |
| Tool Costs | Tool settings on the Tools (AM205500) form | 0.00 | Amount |
| Machine Costs | Machine settings on the Machines (AM204500) form | 0.00 | Amount |
| Fixed Overhead Costs | Overhead settings on the Overhead (AM202500) form | 0.00 | Amount |
| Variable Overhead Costs | Overhead settings on the Overhead form | 0.00 | Amount |
To track the movement of the produced items to a warehouse, the system creates an inventory receipt on the Receipts (IN301000) form, releases the receipt, and creates and releases another batch of general ledger transactions, which are displayed in the following table. You can view the reference number of the inventory issue in the IN Ref. Nbr. column on the Labor form.
| Account | Source of Account | Debit | Credit |
|---|---|---|---|
| Work in Process | Posting class settings on the Posting Classes form | 0.00 | Amount |
| Inventory Asset | Posting class settings on the Posting Classes form | Amount | 0.00 |
A Move Transaction and Related Transactions
You create a move transaction on the Move (AM302000) form when you need to record the movement of produced items to a warehouse. When you release the move transaction, the system creates an inventory receipt on the Receipts (IN301000) form and releases it; you can view the reference number of the receipt in the IN Ref. Nbr. column on the Move form. For the inventory receipt, the system generates a batch of the general ledger transactions shown in the following table.
| Account | Source of Account | Debit | Credit |
|---|---|---|---|
| Work in Process | Posting class settings on the Posting Classes (IN206000) form | 0.00 | Amount |
| Inventory Asset | Posting class settings on the Posting Classes form | Amount | 0.00 |
If tools or machines are involved in the production of the item, the system also creates a cost transaction on the Cost Transactions (AM309000) form and releases it. For the cost transaction, the system generates a batch of the general ledger transactions shown in the following table.
| Account | Source of Account | Debit | Credit |
|---|---|---|---|
| Work in Process | Posting class settings on the Posting Classes form | Amount | 0.00 |
| Tool Costs | Tool settings on the Tools (AM205500) form | 0.00 | Amount |
| Machine Costs | Machine settings on the Machines (AM204500) form | 0.00 | Amount |
Transactions Generated for a WIP Adjustment
You can manually adjust costs for a production order by using the WIP Adjustment (AM308000) form. When you release a WIP adjustment, the system creates a batch of the general ledger transactions listed in the following table. You can find the reference number of the GL batch in the GL Batch Nbr. column.
| Account | Source of Account | Debit | Credit |
|---|---|---|---|
| Work in Process | Posting class settings on the Posting Classes (IN206000) form | Amount | 0.00 |
| WIP Variance | Posting class settings on the Posting Classes form | 0.00 | Amount |
Transactions Generated on the Close of a Production Order
You close a production order on the Close Production Orders (AM506000) form when the quantity of the item in the order is produced in full. (Any number of production orders can be closed on this form.) If the balance of the Work in Process account is nonzero, the system creates an adjustment on the WIP Adjustment (AM308000) form and the related general ledger batch on the Journal Transactions (GL301000) form.
Reversal of Production-Related Transactions
You can reverse all production transactions that you add manually (such as labor and move) by entering a negative quantity or hours on the form, which you use to create the transactions. The easiest way to accomplish this with a minimum of typing is to find the original transaction and create a new transaction by copying its settings. You change the appropriate transaction line quantities or hours to a negative value, and you delete any other lines that you do not need to correct. If batch control totals are used, they must be negative. Then you release the new batch.
For information about reversing production receipts, see Reversal of Production Receipts.