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Former Member

Impact on inventory valuation - releasing costs while mfg is running

All,

What are the implications to releasing a cost roll (the roll is completed through marking, just needs to be released) while production is up and running?  What is the impact to inventory revaluation if the inventory is moving while the costs are being released?  Costs effective January 1 with inventory movements also on January 1 during the roll process.


Thanks much,
Andrea

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3 Answers

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    Former Member
    Dec 24, 2014 at 04:36 AM

    Hi

      Not very clear from your posting....

      Now it is dec...you want to release standard cost from 1st jan 2015 which is estimated and marked for release.

       Yes you can release at the last day of dec 14  to give effect from jan 2015...no effect on your current stock valuation ...because the sock for dec will be valuated at cost of Dec 14

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  • Dec 24, 2014 at 06:01 AM

    Hi Andrea,

    When you release the costs then your inventory what ever stands get revaluated with new costs. Hence forth goods transactions will get valuated with the new costs.

    Regards,

    Mukthar

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    Former Member
    Dec 24, 2014 at 12:32 PM

    Sorry I wasn't clear.


    We have marked our costs.  We will be releasing them on the 1st and we will most likely have manufacturing up and running on the 1st as well.  So while costs are being released, inventory will be moving.  What impact will this have?


    Will we have any issues in production?
    Will we have increased variances for some reason because some materials may be valued at one cost at one point in the day and another at another point in the day because we have updated costs while production was running?

    Are there any other things of which we should be aware?


    Thanks much,

    Andrea

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    • Former Member

      Hi

      That's why SOP is to release the cost at last day of month to give effect from day one before mat movement is carried out.

      Once you move any mat at old cost..new cost release will not be possible

      So..if you want to release ..you release it after 12 pm previous day to give effect and will be better to lock all users for time it gets releases.