Wrong Unit Cost

gopalach77

Dear Colleagues,

I have an Item X with base unit of measure is in Tonnes with unit cost 10,000/-

I intended to purchase the item X 1000 KGS with unit cost 10/-, while purchasing the item by mistake i have not changed the unti of measure and purchased the item X 1000 Tonnes with unit cost 10/- with all taxes.

i have transferred the item X 10kgs to B location and consumed the same. Later when i realised the cost is not showing correct and verified i come across the above mistake. Now, i cannot post the credit memo for 1000 KGs and i cannot unapply the entries. COGS is showing incorrect values.

Suggest me what to do to get the correct value.

Miklos_Hollender

Tough, because transfers can't be unapplied. COGS should not be incorrect because you consumed the correct amount thus the finished product should be OK? Rather you should have a huge inventory value amount, 999990 kgs sitting in Location A. Maybe your inventory value account is your COGS account????? At any rate in this case I would simply write a credit note for 999990 kgs.

Or maybe your description was misunderstandable. Question 1: is consumption correct, yes or not? Question 2: is transfer correct, yes or not? If the consumption is OK but transfer was too much, transfer back the rest, credit note. If the consumption was too high, and the product was also sold, it is a bit tougher. I would try this in a test database first: revaluate the production output. Run Adjust Costs. This makes the sales COGS correct. From the revaluation you get a posting in your Inventory Adjustment account. You then put the part of the consumption that was too high back to stock with positive adjustment. That makes the Inventory Adjustment account back up. Then you credit note the rest.

I.e. if instead of 10 consumed 1000 was consumed at say $10 each, to make 10 finished product, then revaluate the production output downward -$990 as a unit cost, $9900 total, you get $9900 inventory adjustent cost then positive adjustment 990 pieces of components at $10 each, this makes your inventory adjustment account balance back to 0, then you can credit note the 990 back to the vendor.

gopalach77

Hi,

thanks for you reply.

yes i am wrong to mention COGS instead of "inventory value account ".
my consumption and transfers both are correct and the FG is sold out.
Finally, I will try what you have suggested. " if instead of 10 consumed 1000 was consumed at say $10 each, to make 10 finished product, then revaluate the production output downward -$990 as a unit cost, $9900 total, you get $9900 inventory adjustent cost then positive adjustment 990 pieces of components at $10 each, this makes your inventory adjustment account balance back to 0, then you can credit note the 990 back to the vendor."

i will come back in case of any queries.