Value of Inventory-RM/WIP/FG

PPP

Can anybody tell me in Navision , how the flow of raw material issue with value to the accounts such as Raw material inventory/WIPs /Finished goods?

Thanks in advance

PpP

reema

In Manufacturing company, the cycle start from purchase of raw material and end at the selling of finished goods:
Purchase Raw Material >--(convert)--> Work-In-Process >--(convert)--> Finished Goods >>>> Sales of Finished Goods

Thus,there are 3 types of inventory for a typical manufacturing company:
1) Raw Material Inventory - raw material to be used as input in manufacturing process
2) Work-in-Progress (WIP) Inventory - Goods which are still in the process of converting to finished goods. It's not yet a finished good.
3) Finished Goods Inventory - Completed unit output from manufacturing process.

Correspondingly,
Three Inventory accounts are created.
1)RawMaterialInventoryAccount
2)Work-in-Progress(WIP)InventoryAccount
3) Finished Goods Inventory Account

When raw material is purchased, the cost of the raw material will be posted to the Raw Material Inventory acccount. Raw Material Inventory Account will store the value of raw materials received but not yet issued to production department. When the raw material is transferred to production department, the cost of the material will be transferred from Raw Material Intentory Account to WIP Inventory Account. Direct Manufacturing Labor Cost and Manufacturing Overhead Cost will also be debitted into WIP Inventory Account.

Now here if u run the report Inventory valuation – WIP , then you can get some value about the costs of rawmaterial.
If u want to see the values in the report Inventory valuation – WIP, u should not change the Production order status to Finished and Should not run the Adjust Item cost entries.

When the finished is completed, and run the Adjust item cost entries, the WIP Inventory Account will be credited with the total manufacturing cost and the cost will be debitted into Finished Goods Inventory account. When the Finished Good is sold, the cost will be transferred from Finished Goods Inventory Account to Cost of Goods Sold (COGS) Account.
Now if u run the Inventroy valuation report for that Item ( Finished item) , you can get the values.

PPP

Thanks for the reply.

just a confirmation.

I did a purchase entry of RM 500 qty with value of 5000/-
my purchase a/c got debited to 5000/-

I made a material consumption of 200 qty . But only in the inventory valuation WIP report shows the consumption value of 2000/- but not againtst the WIP a/c mentioned int he GL?