Fusion Testing
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TC-08168 : Outside Services/Contract Manufacturing (1704)
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Process Area : F&A
Prerequisites
Work Order created and released for Assembly Item. See test cases below from Ops: TC1267 Create contract manufacturing purchase order and work order via NS formsTC1268 Create contract manufacturing transfer orders via NS forms
Steps To Execute
Role: Kimray Cost Accountant Review Item/BOM Setup and Costed BOM Inquiry Transactions ; Manufacturing ; Costed BOM Inquiry Assembly = 1704CDOS Location = OSYSM BOM Display Control = By Date Date = 10/1/2024 Note the Total Unit Cost Note that the Assembly contains no top level conversion cost but includes component cost from 2 items: 1704CD Inventory Item MACHN170410 other Charge Item representing outside services/contract manufacturing cost Item: 1704CDOS Item Type = Assembly Bill of Materials and Routings Note that the Item contains a Master Default Bill of Materials/Routing but does not have a Routing assigned. Item: 1704CD Item Type = Inventory Item Standard Cost = 9. 9456 ( 8. 96 + 11% Burden) Transfer Price = 8. 96 Item: MACHN170410 Item Type : other Charge for Purchase Purchase Price = 8. 35 Note that the item includes default purchases prices by vendor but the default purchase price is 8. 35 which is rolled up into the cost of the 1704CDOS. Review the following transactions and their GL Impact TO97113 Transfer Order to record movement of 1704CD from OKC Mfg to OSYSM (Contract Mfg Location) From Location: OKC Mfg To Location: OSYSM Item1704CD Quantity = 10 Transfer Price = 8. 96 GL Impact: None IF317360 Transfer Order Item Fulfillment to record fulfillment of 1704CD from OKC Mfg GL Impact: Credit 130210 INVRAW MATERIALS @ Standard Cost in OKC Mfg Debit 130170 INVINTRANSIT @ TO Transfer Price Debit or Credit 520015 MATERIAL BURDEN Variance between OKC Mfg Standard cost and Transfer Price. The Account assigned is sourced based on the Item's Gain/Loss Account IR205923 Transfer Order Item Receipt to record receipt of 1704CD at OSYSM (Contract Mfg Location) GL Impact Debit 130210 INVRAW MATERIALS @ Standard Cost in OSYSM (Contract Mfg Location) Credit 520015 MATERIAL BURDEN @ 11% of Standard Cost Credit 130170 INVINTRANSIT @ TO Transfer Price PO778 Purchase Order to Contract Manufacturing Vendor Item = MACHN170410 Item Type = other Charge for Purchase Quantity = 30 Rate = 8. 35 GL Impact: None WO1457 Work Order created from Contract Manufacturing PO WIP = No Assembly = 1704CDOS Component Item = 1704CD GL Impact = None IR205920 Item Receipt created from Contract Manufacturing PO Item = MACHN170410 Quantity = 10 GL Impact: None ASSYB88 Assembly Build created from WO1457 Assembly = 1704CDOS Component Item = 1704CD GL Impact Debit 130150 INVMFG Parts @ Standard Cost of Assembly Item (1704CDOS) Credit 130210 INVRAW MATERIALS @ Standard Cost of Component(s) (1079CD) Credit 510170 CONTRACT MANUFACTURING VARIANCE. Account sourced from the Expense Account assigned to the MACHN107410 other Charge Item Rate sourced from the PO/Item Receipt rate Debit or Credit 510070 PRODUCTION PRICE VARIANCE. A variance could arise here if the standard cost component of MACHN1074 as incorporated in 1704CDOS is different as compared to the PO/Item Receipt rate of MACHN107 4. Debit or Credit 510060 PRODUCTION QUANTITY VARIANCE. Variances could arise here if a higher or lower component quantity is applied to the Assembly Build vs what is called for on the BOM Revision Variances could arise here if the Standard Cost of the Assembly includes costs from a Manufacturing Routing as actuals are not captured on the Work Order as it is a nonWIP Work Order. IT384 Inventory Transfer to transfer Assembly from OSYSM (Contract Manufacturing Location) to OKC Mfg GL Impact Debit INVMFG PARTS @ OKC Mfg Standard Cost Credit INVMFG PARTS @ OSYSM Standard Cost Debit or Credit Assembly Item Gain/Loss Account This will arise if Standard Costs are different between the two locations. Small rounding differences may also arise Vendor Bill Unit Test Contract Mfg Bill1 Vendor Bill created from Contract Manufacturing PO Item = MACHN170410 Quantity = 10 Rate = 8. 35 GL Impact Debit 510170 Contract Manufacturing Variance (Sourced from Item ; Expense Account Credit 200000 Accounts Payable
Expected Results
Review GL impact of each transaction to confirm accuracy.