Labor Reporting
The backflush transaction that runs when you receive flow scheduled orders automatically reports the standard number of hours specified in routing data for the quantity processed.
Usage variances are calculated on earned hours based on the standard hours to complete the number of units reported complete.
Rate variances are calculated as the difference between the employee pay rate and the standard rate for the work center where the labor was reported.
Labor:
• Debits the WIP account from the work order.
• Credits the Labor account for the department.
• Debits/credits the Labor account and credits/debits the Labor Rate Variance account for the department.
• Debits/credits the Labor account and credits/debits the Method Variance account for the department.
Burden:
• Debits the WIP account from the work order.
• Credits the Burden account for the department.
• Debits/credits the WIP account.
• Credits/debits the Burden Usage Variance and the Burden Rate Variance accounts for the department.
Downtime:
• Debits the Cost of Production account for the department.
• Credits the Labor and Burden accounts for the department.