Accounting for direct materials cost¶
The direct materials cost of semi-finished products is normally included in the raw materials. And the direct materials cost of finished products or final products of manufacturing process is composed of semi-finished products and other materials. In Viindoo, it’s easy to calculate and acumulate this direct materials cost to the production cost.
Requirements
This tutorial requires the installation of the following applications/modules:
Inital Configuration¶
Firstly, we need to do some intial configuration as the guildeline at the article Production costs configuration.
Analysis direct materials cost¶
To understand how the system calculate the direct materials cost, we will analyze the specific situation of a table manufacturing company. Their manufacturing process will be:
Step 1: Transfer wood materials from stock to the production location for the production of Table legs, Table surfaces.
Step 2: Perform production of the Table legs and Table surfaces.
Step 3: Once done, store the semi-finished products in stock.
Step 4: When need to produce the Tables, deliver Table legs and Table surfaces to the production location for the production of Table.
Step 5: Perform production of the Tables.
Step 6: Store Tables in a warehouse.
In Viindoo system, in case you store raw materials and semi-finished products at the production site, steps 1, 3, 4, and 6 will be automatically completed when manufacturing orders are marked as done. Additionally, the system will update the inventory quantity based on the consumption or completed production amount. In case you store them in different places, you will have the corresponding transfer notes by using the supply routes or you can do it manually.
In all cases, once the manufacturing orders are done, the cost of direct materials will be calculated automatically. We will go step by step to understand how the system accumulates the direct material cost in a simple case of storing place is a production site.
Direct materials cost of the semi-finished products¶
To manufacture semi-finished products (Table legs/Table surfaces), refer to the Manage the manufacturing of the semi-finished products article.
After finishing the manufacturing order, you will see the product moves of raw materials and semi-finished products and cost analysis will be generated automatically.
Consume direct materials to manufacture the Table legs:
Store the Tables legs after prodution:
Cost analysis for direct materials cost:
The system will automatically calculate the direct materials cost is consumed to the production. On the completed production order, select Cost Analysis to view the details.
Direct materials cost of the finished products¶
As same as with the semi-finished products process, after finishing the manufacturing order, you will see the product moves of raw materials, semi-finished products and finished product and cost analysis will be generated automatically.
Consume direct materials (Table legs, Table surfaces, Screw, Nail) to manufacture the Table:
Store the finished product Tables after prodution:
Production Cost Analysis:
The system will automatically calculate the direct materials cost is consumed to the production. On the completed production order, select Cost Analysis to view the details.
See also
Related article
Optional module