Apply Burden Rates to Inventory

This section explains what happens when burden rates are applied to inventory for manufacturing order relief issues (in Costpoint Production Control), inventory transfers (in Costpoint Inventory), inventory issues (in Costpoint Inventory), miscellaneous receipts (in Costpoint Receiving), inventory adjustments (in Costpoint Inventory), and Purchase Order (PO) receipts and Quality Control (QC) inspections (in Costpoint Receiving). Use the Post Inventory Journal screen to apply burden rates to inventory.

MO Reliefs

On a positive quantity relief, the Enter Manufacturing Order Reliefs screen in Costpoint Production Control determines burden costs for each direct cost element using the Inventory Burden Summary table to determine the proper rates for each direct cost element's account/organization. The MO's build-to inventory abbreviation is assigned on the Manage Manufacturing Orders screen, and its WIP account/organizations will be used to look up the rates in the Inventory Burden Summary table. The burden costs may or may not be posted in the Inventory Journal process, depending on the situations below:

Scenario	Description
Asset to Asset	This section discusses relieving an MO from an asset build-to inventory abbreviation (the default MO build-to inventory abbreviation has an Acct Type of Asset in the Inventory Abbreviations subtask on the Manage Inventory Projects screen) to an asset finished goods inventory abbreviation. You must have previously set up cost pools on the Manage Cost Pools screen in Costpoint Cost and Revenue Processing so that any burden applied to asset inventory is assigned to the WIP account/organization combinations on the default build-to inventory abbreviation, rather than the finished goods account/organizations. Costpoint uses the Inventory Burden Summary table to calculate burden amounts for each direct cost element using the asset build-to inventory abbreviation's WIP accounts/organizations. The sum of direct and burden costs is debited to the finished goods inventory abbreviation's accounts/organizations and is credited to the build-to inventory abbreviation's WIP asset relief contra account/organization through the Inventory Journal process. This posting occurs even if the allocations to the finished goods and build-to WIP inventory abbreviations are the same. Raw material costs are not burdened if raw material burdening is not done at issue. Costs from finished good inventory issued to the MO are credited to the direct cost element's WIP account/organization to prevent the base accounts from being double charged.
Asset to Expense	This section discusses relieving an MO from an asset build-to inventory abbreviation to an expense finished goods inventory abbreviation (the relief inventory abbreviation has an Acct Type of Expensed in the Inventory Abbreviations subtask of the Manage Inventory Projects screen). Costpoint uses the Inventory Burden Summary table to calculate burden amounts for each direct cost element (excluding costs from already burdened subassemblies or components) using the asset build-to inventory abbreviation's WIP accounts/organizations. The Inventory Journal process credits all direct and burden costs to the build-to inventory abbreviation project's WIP asset relief or RM contra account/organization and debits the allocation finished goods inventory abbreviation's account/organizations. Applied burden is posted to the corresponding direct cost element's account/organization. Again, cost pools must be previously set up on the Manage Cost Pools screen of Costpoint Cost and Revenue Processing so that if any burden is applied to the asset inventory WIP account/organization combination, it will not be assigned to the finished goods expense account/organization. Raw material costs are not burdened if raw material burdening is not done at issue. Costs from finished good inventory issued to the MO are credited to the direct cost element's WIP account/organization to prevent the base accounts from being double charged.
Expense to Expense	This section discusses relieving an MO from an expense WIP inventory abbreviation to an expense finished goods inventory abbreviation, where the default MO build-to inventory abbreviation has an Acct Type of Expensed in the Inventory Abbreviations subtask of the Manage Inventory Projects screen. Costpoint uses the Inventory Burden Summary table to calculate burden amounts for each direct cost element using the default build-to WIP inventory abbreviation's account/organizations. If the WIP and finished goods inventory abbreviations are different, the direct cost relieved amounts are posted. Burden dollars are not posted. The project/account system recalculates and reallocates burden for the expense account/organizations.
Expense to Asset	This combination, when relieving from an expense WIP inventory abbreviation to an expense finished goods inventory abbreviation, is not allowed for manufacturing orders.
Expense to GFM	This section discusses relieving an MO from an expense WIP inventory abbreviation to a GFM finished goods inventory abbreviation. This may occur for a customer repair MO. Costpoint uses the Inventory Burden Summary table to calculate burden amounts for each direct cost element using the build-to inventory abbreviation's account/organization. No direct or burden dollars are posted for these reliefs.

Inventory Transfers

When you transfer burdened material from one inventory abbreviation to another on the Enter Inventory Transfers screen in Costpoint Inventory, and one or both of the inventory abbreviations use average actual costing, the Inventory Journal may post the burdened amount to the General Ledger. The inventory burden cost elements also may be moved to the direct cost elements as part of recalculating the average actual costs. Below is a list of scenarios where the From and To inventory abbreviations on the Enter Inventory Transfers screen have expense or asset account types for a Standard,Borrow, and Payback transfer types are also discussed at the end of the section.

Scenario	Descripiton
Expense to Expense	When you make standard transfers from an expense finished goods/raw material inventory abbreviation to another expense finished goods/raw material inventory abbreviation, the burden amounts are recalculated using the Inventory Burden Summary table rate for the To inventory abbreviation's account/organizations. The calculated burden amounts are kept in the burden cost elements of the To inventory abbreviation when recalculating average actual costs. Burden dollars are not posted.
Asset to Asset	When you make standard transfers from an asset finished goods/raw material inventory abbreviation to an expense finished goods/raw material inventory abbreviation, the burden dollars are pulled from the From inventory burden costs. The burden costs are rolled into the direct cost elements in the To inventory abbreviation's inventory record when recalculating average actual cost. Even though the costs are rolled into the To inventory abbreviation's direct cost elements, the inventory transaction lines will still store the burden amounts in the burden cost element columns. The To inventory abbreviation's burden costs will be re-averaged for the updated quantity but using zero transfer burden costs. During posting, the burden costs are debited to the To inventory abbreviation's direct cost account/organizations (labor burden is posted to the labor account/organization, and so on) and are credited to the From inventory abbreviation's direct cost accounts/organizations.
Asset to Expense	When you make standard transfers from an asset finished goods/raw material inventory abbreviation to an expense finished goods/raw material inventory abbreviation, the burden dollars are pulled from the From inventory burden costs. The burden costs are rolled into the direct cost elements in the To inventory abbreviation's inventory record when recalculating average actual cost. Even though the costs are rolled into the To inventory abbreviation's direct cost elements, the inventory transaction lines will still store the burden amounts in the burden cost element columns. The To inventory abbreviation's burden costs will be re-averaged for the updated quantity but using zero transfer burden costs. During posting, the burden costs are debited to the To inventory abbreviation's direct cost account/organizations (labor burden is posted to the labor account/organization, and so on) and are credited to the From inventory abbreviation's direct cost accounts/organizations.
Expense to Asset	When you make standard transfers from an expense finished goods/raw material inventory abbreviation to an asset finished goods/raw material inventory abbreviation, the burden dollars are pulled from the From inventory burden costs. The burden dollars are kept in the burden cost elements in which they were originally recorded when recalculating average actual cost. During posting, the burden costs are debited to the To inventory abbreviation's direct cost account/organizations (labor burden is posted to the labor account/organization, and so on) and are credited to the From inventory abbreviation's direct cost accounts/organizations.
Borrow Transfers	All transfers with a Transfer Type of Borrow will have burden derived similar to Standard inventory transfers. The burden dollars are kept in the burden cost elements in which they were originally recorded when recalculating average actual cost. The burden dollars are not posted.
Payback Transfers	All transfers with a Transfer Type of Payback will recalculate the average actual cost for the burden amounts by using the payback reservation line's direct cost (that is, original borrow direct cost) and current burden rate for the current To (originally From) inventory abbreviation's account/organizations. The burden dollars will be kept in the burden cost elements in which they were originally recorded when recalculating average actual cost. Payback transfers will also recalculate the average direct and burden costs for the current From (originally To) inventory abbreviation using the same logic as during the Borrow transfer, but with quantities reduced by the payback quantity. The burden dollars will not be posted for Payback transfers.

Issues

This section describes the scenarios that apply when you use the Enter Issues to Project/Account/Org or PO screen in Costpoint Inventory to issue inventory from expense, finished goods asset, and raw materials asset inventory abbreviations.

Scenario	Descripiton
From Expense	Positive issues from expense inventory abbreviations do not post burden amounts to the General Ledger, regardless of the To project/account/organization combination. The burden cost elements are recorded on the inventory line for reference purposes.
From Finished Goods Asset	Positive issues from finished goods asset inventory abbreviations have their direct and burden costs debited to the To inventory abbreviation or charge number. If inventory is issued to an inventory abbreviation, the direct and burden costs of each element are posted to the inventory abbreviation's account/organization for that cost element. If inventory is issued to a MO, the WIP account/organizations are debited. The From inventory abbreviation's accounts/organizations are credited for the direct and burden costs by cost element.
From Raw Material Asset	For MO Issues, if raw materials are burdened at issue, the raw material inventory abbreviation's material and subcontracts costs are burdened in MO WIP calculations and upon relief. For all other issue types, the project burdening process handles the burdening of the direct costs. For negative issues, reverse the debit and credit amounts listed above.

Miscellaneous Receipts

This section describes the scenarios that apply when you use the Receive Miscellaneous screen in Costpoint Receiving.

Scenario	Description
To Finished Goods	If the quantity being increased is going to an inventory abbreviation with an Inv Type of Finished Goods and an Acct Type that is not GFM (as selected in the Inventory Abbreviations subtask of the Manage Inventory Projects screen), the value of the burden amount for any non-zero direct cost element is computed, and that calculated burden is included when recalculating average actual cost for that inventory. The Inventory Journal does not post burden amounts.
To Raw Materials - Burden on Receipt	If the quantity being increased is going to an inventory abbreviation with an Inv Type of Raw Materials and an Acct Type that is not GFM (as selected in the Inventory Abbreviations subtask of the Manage Inventory Projects screen), and if raw materials are to be burdened upon receipt, the value of the burden amount for any non-zero direct cost element is computed, and that calculated burden is included when recalculating average actual cost for that inventory. The Inventory Journal does not post burden amounts.
To Raw Materials - Burden on Issue/No RM Burdening	If the quantity being increased is going to an inventory abbreviation with an Inv Type of Raw Materials (as selected on the Inventory Abbreviations subtask of the Manage Inventory Projects screen) and if raw materials are not to be burdened or burdened upon issue, burden costs of the transaction line will be zero. The Inventory Journal does not post burden amounts.

Adjustments

This section describes the scenarios that apply when you make an inventory adjustment (that is, Quantity, Scrap, or Cost) in the Adjustments menu of Costpoint Inventory.

Scenario	Description
From Expense	Adjustments from expense inventory abbreviations are not posted as burden to the General Ledger, regardless of the To project/account/organization combination. The burden amounts are recorded on the inventory line for reference purposes.
From Asset	For negative adjustments, the direct and burden costs are credited from the "From" inventory abbreviation cost element's project/account/organization. The charge to P/A/O/inventory abbreviation is debited. Credits/debits will be reversed for positive adjustments.