HI Kini
Yaa this is a good one, this is k for the Item where re-packing is required, what about the item where its just bought and sold, no PM comes into picture.
From: Balaji Subramanian [mailto:balaji@techconet.co.in] Sent: 01 October, 2008 7:59 PMTo: Ritesh Kini M; Rajat Kalia; vkrishnanCc: Venkat Narayanan K R; RamamurthySubject: RE: Scenario in NEI
I agree this is ideal.
With Warm Regards,
Balaji Subramanian
+ 91 - 99406 48190
+91 (44) 43951299
From: Ritesh Kini M Sent: Wednesday, October 01, 2008 8:10 AMTo: Rajat Kalia; vkrishnanCc: Venkat Narayanan K R; Balaji Subramanian; RamamurthySubject: RE: Scenario in NEI
Doesnt need to be a production order - just an assembly BOM.
PM cost of purchase should get updated accordingly - not as much the packing process cost - which in any way is negligible - an item charge can still be assigned if substantial - standard 3%.
Therefore,
FG(Packed item) - Standard Cost
RM - Average
PM - Average.
BOM journal for FG,RM and PM, Inventory is updated accordingly. Run Calc. Standard Cost Worksheets batch for FG and you should get what you want as FG - Packed item cost (without process cost).
In the invoice add the packing charges as item charge and assign.
Think this should work. Let me know if any doubts.
Thanks and Regards
Ritesh KiniSenior Business AnalystPrecision Techconet (P) Ltd(A Precision Group Company)Mobile: + 91 99406 80038Phone: +91 44 43951200 Ext : 273www.techconet.co.in---------------------------------------------------------------------------------------------
From: Rajat KaliaSent: Wed 10/1/2008 12:41 AMTo: vkrishnan; Ritesh Kini MCc: Venkat Narayanan K R; Balaji Subramanian; RamamurthySubject: RE: Scenario in NEI
Hi All
Thanx for the suggestions, let me put the scenario in detail as all of you assumed that Production Order will be made for these things. The Item is purchased from vendors and few of them are not even repacked but sold just like a normal trading. This is because it is a branded one. However some of them are tested and repacked, and yet some of them are used in Production of DB (FG). But for these things no production Order is made, not even a BOM is made (for PM) as only the packing material is required for which the cost of packing is too less, The inventory for the packing material is reduced when the issue is done but for GL purpose approx 3% value of the FG is taken. The Production Order is made only in case it is used in DB.
Based on this I was thinking should we put the Item category for the Item as RM. If yes then there have to be 2 Items (as they will not agree to put the Item category as RM for the item that is sold), one that is purchased from Vendor will be part of BOM along with the packing material for the FG. Now the problem may come because they will have to make Prod Order, consump, output etc and the cost for PM is too less and more work. The costing in the above case will be taken care as the Avg costing will happen for the material purchased from the Vendor + the work centre cost for capacity
The other option is to put the Item category as FG. If yes then what should be the costing method:
Standard – Initial cost taken in the Item card will be posted for all the Purchases, even though the actual price charged by Vendor may be different. The difference is posted to Variance, so before sales should he update the cost through the standard cost worksheet always as Purchase Price + packing charges, which again looks may not be acceptable to them
Average – Only for these Items the costing method can be average so that the Purchase Price will be averaged, but now again then how to specify the packing cost before sales is done in case Production order is not made.
Kindly suggest.
With Regards,
Rajat.
From: vkrishnan [mailto:vkrishnan@techconet.co.in] Sent: 30 September, 2008 12:45 PMTo: Ritesh Kini MCc: Venkat Narayanan K R; Rajat Kalia; Balaji Subramanian; RamamurthySubject: RE: Scenario in NEI
My suggestion, based on the broad understanding of the issue(which do need elaboration, as I don’t know about the project):
With One-level roll-up of costs or by using Standard Cost Worksheet, we can always update the Cost of FG based on the Average cost of inputs, even if we have the valuation method for FG as Standard. Of course, we have to setup a BOM with PM for this, as suggested by Kini. If the client does not want to go through the bother of setting up BOM etc. or if the PM cost is negligible(which they may want to charge off), we can try Item Variant, by setting up an SKU for Item+Variant Code. While the cost will be same for plain or packing variants, we can even set up separate selling prices for plain/repacked goods(For all customer, specific customer or customer price groups).
Regards,
V. Krishnan
From: Ritesh Kini M Sent: Tuesday, September 30, 2008 9:04 AMTo: Rajat Kalia; Balaji Subramanian; RamamurthyCc: vkrishnan; Venkat Narayanan K RSubject: RE: Scenario in NEI
Why dont you take it through a route - packing process and add the PM in the BOM. It's 2 separate items then - RM and FG.
FG has standard cost, Packing material work center has a process cost, the RM has a purchase price and cost therefore - the PM cost is added to the FG when it passes through the route and BOM. Think through and let me know if it works for you.
Has to work liek that in India and we are doing it for an india customer. Excise rules - Trading is not allowed on an excise registration for manufacturing,so.
Venkat,Krishnan - your comments please.
Thanks and Regards
Ritesh KiniSenior Business AnalystPrecision Techconet (P) Ltd(A Precision Group Company)Mobile: + 91 99406 80038Phone: +91 44 43951200 Ext : 273www.techconet.co.in---------------------------------------------------------------------------------------------
From: Rajat KaliaSent: Mon 9/29/2008 9:00 PMTo: Balaji Subramanian; Ramamurthy; Ritesh Kini MCc: Rajat KaliaSubject: Scenario in NEI
Hi Balaji
We have a scenario in NEI. There are few Items which they buy and change the label or packing and sell to Customers. Should we put the Item category as RM or FG for them.
I spoke to Afzal he says that these are FG, but if I put the Item Category as FG then the costing method should be Average or Standard. If I give Average then the system is going to average the Purchase price and that will be the cost in my sales Order, but if I give the costing method as Standard then I have to give some cost initially in the Item card and in case the Purchase price is different which it is then the system takes the cost from the Item card and the difference between the Item Card cost and the Purchase Price it posts to variance.
Could please suggest.
With Regards,
Rajat.
