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This text refers to program version 6.1  

Nominal Ledger Transactions from Production Operations

When you mark a Production Operation as Finished and save it, a Nominal Ledger Transaction will be generated automatically if you have so determined in the Sub Systems setting in the Nominal Ledger and in the Number Series - Productions and Account Usage Production settings.

The postings in the Transaction will depend on the position of the Production Operation in the sequence. If the Operation is not the last one in the sequence, the Transaction will credit the value of the Input Items to a Stock Account and debit that value to a Work In Progress Account, as follows:

  1. The Input Costs will be credited to the Stock Account from the Location.

  2. If the Location does not have a Stock Account, or you have not specified a Location, and if you are using the Use Item Groups for Cost Accounts option in the Cost Accounting setting in the Stock module, the Input Costs will be credited in the appropriate proportions to the Stock Accounts of the Item Groups to which the Input Items belong.

  3. In all other circumstances (i.e. if you are not using the Use Item Groups for Cost Accounts option or an Input Item does not belong to an Item Group), the Production I-cost Account, as specified on the 'Stock' card of the Account Usage Stock setting in the Stock module, will be credited.
If you have specified Objects in any of the rows, separate credit postings will be made for each Object/Account combination.

The choice of Stock Account described in steps 1 and 2 above means that it will not be possible to distinguish the value of Items removed from stock to be used in Productions and Production Operations from the value of the same Items removed from stock for other purposes (e.g. Delivery or Stock Depreciation). If you need to make such a distinction, specify Components Usage and Production Control Accounts in the Account Usage Production setting, in the Item records for the components and/or in the Item Groups to which the components belong. If you do so (i.e. if you specify both a Components Usage Account and a Production Control Account), the Transaction will contain additional postings, debiting the value of the components to the Components Usage Account and crediting that value to the Production Control Account.

The Production Operation may contain extra rows allowing you to record the running costs of the Operation. If you have used the Time options on the 'Cost Items' card of the Production Settings setting to choose that you will record Fixed Time against Production Operations, the Production Operation will include four extra rows for each of the cost types, using the Labour Cost Item, Setup Cost Item, Move Cost Item and Queue Cost Item specified in the same setting. If you have chosen to record Actual Time, the Production Operation will include one extra row, using the Labour Cost Item (providing you have used the 'Add Labour' Operations menu function to bring the labour cost into the Operation). If you are using the Use Item Groups for Cost Accounts option, the costs in these rows will be credited to W-cost Accounts chosen as follows:

  1. The W-cost Accounts will be the Production W-cost Accounts specified in the Item Groups to which the relevant Items belong.

  2. If an Item Group does not have a Production W-cost Account, the W-cost Account will be taken from the Account Usage Stock setting.

  3. If there is no W-cost Account in the Account Usage Stock setting, the Stock Account in the Item Group to which the relevant Item will be used as the W-cost Account.
If you are not using the Use Item Groups for Cost Accounts option, the running costs will always be posted to the W-cost Account in the Account Usage Stock setting. In this case, you will not be able to save a Finished Production Operation with running costs if you have not specified a W-cost Account in the Account Usage Stock setting.

If any components in the Production are Service Items, they will be treated as Work Cost. Their value will be credited to a W-cost Account chosen as described above, using if appropriate the Production W-cost Account in the Item Groups to which the Service Items belong.

If the Production Operation contains a row for Machine Cost (i.e. you are using the Auto Calculate Cost of Produced Items option in the Production Settings setting, you have specified a Machine Cost Item in the same setting, and you have specified a Running Cost/hr in the Asset record for the Machine specified in the Production Operation), the Machine Cost will also be credited to a W-cost Account. This will be chosen as described above, using if appropriate the Production W-cost Account in the Item Group to which the Machine Cost Item belongs.

The total value of the Input Item(s) (including Items representing running costs) will be debited to a Work In Progress Account chosen as follows:

  1. If you are using the Use Item Groups for Cost Accounts option, and the Input Item belongs to an Item Group in which you have specified a Work In Progress Account, that Account will be used.

  2. If you are not using this option or the Item Group does not have a Work In Progress Account, the Work In Progress Account will be taken from the Account Usage Production setting.
Illustrated below is an example Nominal Ledger Transaction created from a Production Operation that is not the last one in a sequence:

If the Operation is the last one in the sequence, the Transaction will debit the value of the Output Item to a Stock Account and credit that value to a Work In Progress Account. These Accounts will be chosen as described above. The Work In Progress Account will be taken from the Item Group to which the Output Item belongs (if you are using the Use Item Groups for Cost Accounts option) or from the Account Usage Production setting.

Illustrated below is an example Nominal Ledger Transaction created from the last Production Operation in a sequence:

When you first create a Production Operation, the Input and Output Costs in each row will be taken from the parent Production. Each time you save the Production Operation, these figures will be updated with the Item's unit stock value (if the row contains an Input Item) or by a unit value calculated from the total value of the components including running costs (if the row contains an Output Item). The unit stock value of each Input Item will be calculated using the Cost Model specified in the relevant Item or Item Group record. If that Cost Model is Default, the Primary Cost Model specified in the Cost Accounting setting will be used.

If you have specified in the Account Usage Production setting that you will wait until Finishing the Production before updating the stock valuation in the Nominal Ledger, no Transactions will be created from Production Operations. Instead, a single Transaction will be created from the Production, posting every removal and addition to stock at once. In this situation, all Production Operations must be Finished before you can create the Transaction by Finishing the Production.

Once the Transaction has been generated from a Production Operation, you can look at it straight away using the 'Open NL Transaction' function on the Operations menu.

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