Hello,
We have an issue with our system where in for Work Orders, the Raw Materials are being posted to the G/L on the valuation basis of Historical AUC (Avg cost), but the Finished Good is being applied to the G/L based on a different valuation method (It is using cost source = ORDER PRICE), which is neither standard cost nor average cost. My guess is that this is the real purchase price of all the raw materials used in production. However, the finished goods should be posting Historical AUC (or REAL cost price).
All the product-sites have the correct valuation methods of AVC, so I'm wondering where the trigger is to change this so that there is some consistency in the Inventory sub-ledger balances.
The difference between the so-called "STANDARD" (or Order Price) and the REAL cost price (rolled up average costs of RM's) is applied to WIP inventory and must be reconciled at the end of the month, which takes a while.
Does anyone know how to change this and what point in the system that this is triggering?
Thank you.