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Is there a good way to remove an incorrect overhead cost?

jeremyd45
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We have a client that had an error on their production orders and accidentally applied overhead to all of their outside processes. it was not realized until the production orders were completed (NOT Closed), but there are roughly 1000 production orders that were effected. 

They tried to do a WIP adjustment to offset the costs, but that was not effective, as it was reversed when the production order was completed. 

If anyone has any thoughts on how to best remove these, that would be helpful.

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Best answer by vkumar 3 May 2022, 03:42

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V
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Hi @jeremyd45 

Please refer to the instructions provided on following documentation to adjust the cost. Refer to ‘WIP balance correction’ section to adjust cost of ‘Completed’ production order (not closed). 

https://help-2022r1.acumatica.com/(W(1))/Help?ScreenId=ShowWiki&pageid=867222a3-f774-4253-a0d5-4aa3c6701365

Hope this helps,

Regards,

VijayKumarU
nathantrauscht
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@vkumar I did not see a method for reversing an overhead transaction. Overhead transactions are created by a move transaction and when doing a negative move transaction it did not reverse the overhead cost.

Any suggestions?

D
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@nathantrauscht, do you backflush labor?  Is your overhead rate applied based on direct labor hours?  We backflush labor and our overhead rate is tied to direct labor hours, so when we do a negative Move, it does reverse the overhead entry.  Below is an example of a negative Move that reversed the overhead.

If you do not backflush/have OH tied to direct labor, I’m not sure of the best method to remove the overhead if a WIP Adj does not work.  I still wonder if some form of WIP Adjustment is the best way, but maybe there is a certain way to do it that works better than other ways.

nathantrauscht
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@danielklumpp we do not backflush labor, it’s all by clock entry records. But, I know I have reversed OH in the past with a negative move transaction.

 

I believe I know why the OH did not get adjusted on this particular production order with a negative move transaction. The employee clocked in on the wrong production order and we moved the labor prior to the negative move transaction. Thus, there was no labor hours/cost on the production order at the time of the negative move.

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