Manufacturing Costing and Closing

Manufacturing costing answers one question honestly: what did this actually cost to make. Every production run puts its output into stock at what it drew, and closing the work order settles whatever cost is left over, so work in progress nets to zero rather than accumulating a balance nobody can explain.

How a run is costed

A production run values its output at the cost of the material, labour and overhead it actually consumed. There is no standard cost sitting between the two — what went in is what comes out valued at.

Closing the order

Work orders record their close date, so it is always visible when an order stopped being live.

Reopening and voiding

A closed order can be reopened. A run whose output is still in stock can be voided. The order can then be closed again, and the costing works out correctly the second time — the close is a calculation over the order's state, not a one-way entry that has to be unpicked.

Settle WIP

Settle WIP deals with orders closed before closes settled their cost. Those orders left a balance behind; this moves it. It is a one-off for historic orders, not part of the normal cycle.

Run Settle WIP once after upgrading and check the work-in-progress account afterwards. A balance that persists is orders that were closed under the old behaviour, and it will not clear itself.

Component batches

Production draws component batches from stock earliest expiry first. For anything perishable that is the behaviour you want, and it means batch traceability reflects what was genuinely consumed.

Where to see the cost

Related pages

• Work Orders — the orders being costed
• Manufacturing Reports — the costing reports
• BOM — what a product is made of
• Job Work — cost of work done outside