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"Valuation based on" information in Goods Receipt from Production Journal Entry

Jan 27, 2017 at 02:59 AM


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Dear experts,

Below is the journal entry for Goods Receipt from Production.

Can someone please explain me about the highlighted information?

Best Regards,


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1 Answer

Arun Mavinahally Lakshmikantha
Jan 27, 2017 at 04:44 AM

Hello Fred,

The following examples show how business transactions are valued in Production.



Service confirmationQuantity × Cost RateGoods issue into productionCurrent Inventory Value ÷ Current Inventory Quantity × Quantity Issued

Note: “current” means before the issue

Goods receipt from production

Quantity × Inventory CostOverheadValuation based on percentages in the overhead ruleWIP clearingDifference between current production costs and goods receipt

Please refer to below help documents too.

1. Valuation of Business Transactions

2. Valuation of Material Inventories Valuation

Hope this is helpful to understand how valuation happens for an inventory material.

Best Regards,

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