Non-Standard Work Orders
Non-Standard WO: Rework
Rework
Rework is used to repair items and uses the same calculations for variances as normal work orders. However, repair work orders have only one component, the item itself. Therefore, if 10 units of an item are to be reworked, then 10 are issued at standard to WIP, and if 10 are received as good items to stock, they will relieve WIP at standard. This will leave material issued and labor in WIP, which will be expensed as variances:
• Unrepairable units should be recorded as Scrap in the receipt, so they are written off to scrap
• All value added to rework orders are expensed as variances
Note: Use unique work order numbers for reworks and reclassify variances by journal entry (for labor and burden). Material variances can be redirected by changing accounts in Work Order Maintenance (16.1). Perform Work Order Accounting Close separately for these work orders.
Expense
Expense work orders (Type E) are used for non-inventory jobs, such as engineering prototypes or design projects. They are tracked by a work order so costs can be accumulated. Usually a special GL account and project code are entered.
• Expense work orders are normally not used for direct material and not received. Therefore all material and labor are expensed as variances.
• Expense work orders should not be accounting closed because the amount will be credited out of the Special GL account used and charged to variance.
