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Former Member
Jan 06, 2011 at 05:35 PM

Raw Material Consumption to Process Orders

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Hi Friends,

I need help with changing the way how we consume raw materials in our manufacturing organization.

Current Process:

A. Receive product A in Warehouse, movement type 101. Debit Inventory Account, and Credit GR/IR.

B. Move product A to a storage location (out of Warehouseu2019s custody). Movement type 311. No impact to P&L, as no accounting entries.

C. Consume product A in a u2018Process Orderu2019 from that storage location 311. Debit Consumption Account, and Credit Inventory Account.

Product A is listed in Bill of Materials and has to be issued to process orders for final consumption u2013 to give production variance as we are on standard costing system.

Desired Process:

We want to have stronger controls in our organization. We want to hit P&L in step B, as soon as Warehouse issues items out. This can be done using movement type 201 GI for Cost Center.

But we also desire to see final consumption happening in process orders, as all our BOMs and standard costs account for the consumption of product A.

Please advice how do we issue items to a process order that have already been issued to a Cost Center. What is it that I am missing?

Thanks,

Meet A