I have created a simple-as-possible manufacture scenario so as to understand stock and accounting consequences.
In a nutshell to produce 5 litres of finished product (Chemical D):
- 5 each of 4 raw material items (Labelled bottle and Chemicals A, B & C)
- Raw materials: $10.48 ($52.40 for 5)
- Operating costs: $8 ($40.00 for 5)
- Total: $18:48 ($92.40 for 5)
What I actually see in the Stock Entry generated from the finished Work Order is:
- Total Incoming Value: $ 302.00
- Total Outgoing Value: $ 52.40
- Total Value Difference (Out - In): $ 249.60
The only way I can see to get $302 incoming is by squaring!! the number of items, multiplying by raw materials costs then adding operating costs:
- 5 x $52.40 = $262
- $262 + 40 = $302
- Is this expected behaviour?
- If so, why does it make sense?
- If not, what can I have done wrong (am I causing the squaring)?
Work Order Before
Bill of Materials
Stock Entry After
- 4 through 13 create initial stock
- 14 through 17 create finished good.
Sorry to dump so many images.