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Challenge of WIP Cost Allocation in Partial Operation Completion (Single Process Group)
We are facing a costing issue related to WIP and Routing behavior under partial completions within a single process group. Below is the detailed technical explanation.
1. Transaction Challenge
Work Order Details
- Work Order Quantity: 1,000 pairs
- Material Issue Date: 01.01.2026
- Routing: 4 operations under a single process group (Stitching)
- Costing Method: Average
- WIP & Routing: Enabled
Production Activity
Date | Activity | Quantity |
|---|---|---|
01.01.2026 | Material Issued | 1,000 pairs |
10.01.2026 | Completion of Op 1–3 | 400 pairs |
11.01.2026 | Completion of Op 4 (Final) | 50 pairs |
12.01.2026 | Completion of Op 4 (Balance) | 350 pairs |
2. System Behavior Observed
On 11.01.2026 (Build of 50 pairs at Final Operation):
The system transfers to Finished Goods:
- Full material cost issued for 1,000 pairs (from 01.01.2026)
- Labor and Overhead costs accumulated for 400 pairs across first 3 operations
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