[Jeff Ogle]

Any help would be greatly appreciated! 

We are having difficulty in getting the outsourcing costs to be applied to the closing of the MO. When we receive the outsourced PO, the PO amount is posted to our WIP account as well as the AP General account. But when we close the MO, $0.00 are posted .  Any ideas on why the outsourced amount is not being applied to the MO ?

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Jeff Ogle
Sr. Software Application Analyst
Provision Health Alliance
Knoxville TN
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[Richard Ward]

Jeff,

It sounds to me like it’s working correctly…I’m not sure what you are hoping to see.  Here’s how it works in my experience:

1.  You create the BOM with the Outsourced costs included…let’s assume $10/unit
2.  When you roll up your standard cost, that cost is included in the total standard.
3. You create an MO, and issue the outsource PO,
4.  You receive the services on the outsource PO into WIP…so now that portion ($10) of the standard is included in your WIP
5.  When you receive the goods into stock, the rolled up standard, including the $10 cost, is removed from WIP

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Richard Ward
Vice President – Controller IPD
Storm Industries, Inc.
Torrance CA
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