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8 Cards in this Set

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BOM
Bill of material is an item made up of other items. A BOM's cost is derived from it's components & the cost of producing the item. When production is complete, a BOM is a 'finished good' that can be sold. The price of the BOM can be manually assigned or calculated by marking up the costs incurred in making it. They can be simple or complex. It is possible to have BOM's within a BOM - sub assembly or sub-BOM.
WIP
Work in Progress. If costs are posted DURING the production life cycle they are posted to "Work in Process" accounts in the general ledger. When the production process is completed, the "finished good" inventory account is posted w/ the total cost of the production & the Work in Process accounts are offset.
What happens if not using WIP?
Costs are not posted until the production is completed. This also means the raw materials' quantity-on-hand is not reduced until the production is complete.
Operation
A step in the production process. EX-cutting, mixing, painting, assembly.
Work Center
The machine, persons, tools, or vendors used to perform the operation. Used for dteremining capacity when scheduling. Ex-Press machine, Assembly workers, Paint sprayer.
Route
The sequence & length of time for operations that produce a Bill of Material item. If each item is unique, there might be a route per inventory item; if not, several items can be attached to the same route.
Item Consumption
Transferring the cost of the BOM components, aka raw materials, to the prodiction order &/or WIP accounts. The quantity-on-hand of the component items is reduced. Item consumption can be done automatically in AX or manually by entering a picking list journal. The item consumption can occur during the production process (WIP) or when the finished good is completed.
Route Consumption
Calculating the cost of a production operation and transferring that cost to the production order &/or WIP accounts. The cost of operation is made up of labor, tools, machine costs, vendor costs, and overhead. When an operation in the production process is performed costs are generated. These costs are referred to as consumption. Consumption can be posted automatically in AX or manually by entering a route card or job card journal. Hours or quantitity can be used to calculate the route consumption.