This is an Inventory clearing account for bulk issue items (for example, nails or nuts and bolts) that are part of the product structure, but which are not issued in the normal manner. Such items, coded in Item Master Maintenance (1.4.1) (or Item Planning Maintenance (1.4.7) or Item Site Planning Maintenance(1.4.17)), with an Issue Policy = No, are issued to the floor using an unplanned issue transaction (Issues, Unplanned, (3.7)). The system uses the Floor Stock account rather than the Cost of Production account, though, so that the material is not expensed. The issue transaction creates a debit to Floor Stock and a credit to Inventory.

Tracks the difference between actual quantity issued and the standard quantity required in work orders. Since the standard cost of the item is inflated for yield losses, differences due to yield are reflected here. This variance is calculated and posted when the manufacturing order is accounting closed. Usage variance will also be calculated for substitute materials issued to work orders, work order bill modifications that add materials, phantom use-up logic under some conditions, component issues to rework jobs, and for any materials issued to an expense job that is accounting closed.

Tracks the difference between the GL cost of an item at the time it is issued to a work order and the frozen cost of the item in the work order bill. You get this difference when you issue material from a different site and it has a different cost or when you change GL costs without updating WIP.

This is the GL account code normally used to track the mix variance. The product line Mix Variance account is used as a default on all manufacturing orders for Co-Products/By-Products in the product line.

Miscellaneous production costs that cannot be tracked to a specific work order, such as unplanned issues. Also serves as the clearing account for subcontract purchase transactions on work orders. When a subcontract purchase order is received, the cost of the subcontract item will remain in the Cost of Production account if no work order was linked to the subcontract purchase order.

Tracks the difference between the quantity received on a subcontract PO and the quantity completed in work in process.

This variance can be due to yield differences and rework, for example. It is calculated and posted by Work Order Accounting Close (16.21). A positive quantity multiplied by the subcontract operation cost is debited to Subcontract Usage and credited to WIP.

Tracks the difference between the subcontract PO price and the standard subcontract cost in the routing for an item. This is calculated and posted at the time the PO Receipt is processed. A positive rate difference multiplied by the quantity received at purchase order receipt is credited to WIP and debited to the Subcontract Rate Variance account.

Tracks work-in-process inventory value.

Tracks any unexplained manufacturing variances at work order or cumulative order accounting close. Method variance might be due to alternate routings, alternate product structures, timing of changes to item cost standards, lot size variance, or a rounding remainder.