Standard cost for manufactured item

When dealing with assembling/production you will not see any standard material cost before the first assembling/production. This standard material cost is saved with many decimals, to avoid rounding errors.

I cannot reproduce any errors here. Please be specific with more data during the process. Maybe there are some misunderstanding here?

/Joe

I have some guess about this problem. Correct me if I'm wrong.

According to my example, the price for manufactured item in inventory account in general ledger is based from total sum of all cost (material, labour, and overhead).

I have my data like belom for item A (manufactured item)
material cost : 800
labor cost : 500
overhead cost : 200

When I open my balance and do an adjustment, the unit price is 1500 (total of all cost above). So, if I entered 10 items of A, the inventory account will have 15000.

I already confirmed this. Then, I test it with crate a work order that produce 1 A.  I test it wth advance manufactured and I don't enter the cost (I click release and then produce). The GL entry is like what I expected. My inventory account for manufactured item has increased exactly like the total value of material used. But the standard cost is changed so that it have many decimals. Why the value change? I don't know where is this value come from. Is it because I didn't enter any other cost, like overhead and labour cost? Is this value come from total value of manufactured item divided by total quantity?

It's true for the first work order. But when I create another work order with different labour and overhead cost, I can not get from where the material cost, labour cost, and overhead cost. Another thing is my accountant told me that the price for manufactured item in inventory account is counted only from material. So, I wonder, which is right because in Frontaccounting, the price is calculated from total cost, including labour and overhead. Can you give me some accounting reference for this calculation? And maybe every calculation in Frontaccounting must have some guidelines so that we can crosscheck the calculation.

Thank you for your reply. When I use item adjustment, this works fine. If I set the material cost 70.000 and labour cost 75.000,
the adjustment seems right. My stock account value in balance sheet become 75.000.

The problem occur when I use work order to produce it. I use raw material which total 70.000 and add a labour cost 5.000. But, something happen because my initial qoh is 0. It's in work_orders_db.inc (function add_overhead_cost) that cause this.

if ($qoh > 0){
            $overhead_cost = ($qoh * $overhead_cost + $costs) / $qoh;
        }else { // Journal Entry if QOH is 0/negative 
            global $Refs;

            $id = get_next_trans_no(ST_JOURNAL);
            $ref = $Refs->get_next(ST_JOURNAL);

            $stock_gl_code = get_stock_gl_code($stock_id);
            $memo = "WO Overhead cost settlement JV for zero/negative respository of " . $stock_id;
            //Reverse the inventory effect if $qoh <=0
            add_gl_trans_std_cost(ST_JOURNAL, $id, $date_, $stock_gl_code["inventory_account"], $stock_gl_code['dimension_id'], $stock_gl_code['dimension2_id'], $memo, -$costs);
            //GL Posting to inventory adjustment account
            add_gl_trans_std_cost(ST_JOURNAL, $id, $date_, $stock_gl_code["adjustment_account"], $stock_gl_code['dimension_id'], $stock_gl_code['dimension2_id'], $memo, $costs);

            add_audit_trail(ST_JOURNAL, $id, $date_);
            add_comments(ST_JOURNAL, $id, $date_, $memo);
            $Refs->save(ST_JOURNAL, $id, $ref);
        }

I don't get the else part. Because that, the value of finished goods become 70.000 and the material cost change into 65.000. The labor cost still 5.000.

But what is the reason for that? I have 0 product and enough material to produce that. I think in the balance sheet, it's enough to convert the total raw material asset to finished goods asset and add some expense in profit/loss report. Why must it reduce the finished goods asset?