Hi there
I have a client using PM and has brought up the following:
- The problem I did find was that the transacted cost of the partially completed work orders was not accurate. I believe this was the same problem we were investigating previously and suspected it to be FIFO inventory. Turns out it was not FIFO. Looking at WO#52 again, the projected cost per unit was $16.74 but the transacted cost was actually $14.71. This was surprising since we had issued the right amount of labor and had selected the 'Relieve WIP as a percent of completion' box. After some digging I figured out the transacted cost was equal to the current cost divided by the quantity planned. That is not at all intuitive to me. I expected it to be the current cost divided by the quantity completed. I still don't have a clear explanation as to why the system would calculate that way.For me the next steps would be to complete the remaining quantities on WO 52 & 53, and look at the variances and transacted costs. Then, I would repeat the test with new WOs but uncheck the 'Relieve WIP based on percent of completion' box to see if that has any positive effect.
Can any one either confirm or deny that PM when PM does costing for the completed parts, it uses "costs/quantity planned" versus "costs/quantity completed"? I seem to remember this with Work Order for partial completions, but i could be wrong.
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Douglas Luchansky
ACI Consulting
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