We close our work orders to stock once they complete manufacturing. We have issued all raw materials consumed in that step and confirmed the operation. 907 transaction closes material to stock.
Material then fails in our quality stage.
My impression now is that the material is scrap.
I am being told we should reverse the 907 and close for zero yield.
When should we close for zero and when should we scrap?
If we made tangible product (regardless if it is good or not from a quality perspective). We cannot classify this build as zero yield. It yielded product it just didn't meet our quality specs.
Closing for zero buries the cost in work order variance as opposed to scrap.
Trying to determine what the appropriate practice is.
Please advise.
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