I have a question about controlling in manufacturing. Do you know if and how a cost allocation / distribution to an order can be done. Our customer determines overheads based on statistical value when creating a production order. But these are theoretical costs and a kind of pre-calculation.
Is it possible to assign actual costs after post-calculation/ after completed Production Order ?
Thank you in advance.
Best answer by kristianharianja
Hi, It’s a good idea if you put the cost during pre-production as an estimate. You can do this via overhead allocation that is driven either by per qty completed, machine hour, labour time, etc. You have several options in how overhead cost is allocated. When production completed this estimation will be allocated to the goods that you manufacture. When you get the actual cost you just clear off the estimation, could be by WIP Adjustment after production completed or through journal. WIP Adjustment is one of the process that is purposely to adjust production WIP amount, a process that you can use to allocate certain cost that might have not been allocated yet to the production order.