Defining the Percent of Cost Calculation Method

The Percent of Cost calculation method divides the cost entered by the total outstanding Work-in-Process (WIP) to arrive at a percentage. This percentage is applied to each detail record to clear a proportional amount of WIP from the WIP outstanding for each step. The total resulting from applying this percentage to each detail record is then credited to WIP and debited to the appropriate finished goods or scrap account.

Because multiple completions to the same work order can be processed during the same batch, completion transactions must take into account the multiple completions a work order can possibly have in any given batch. Because of this, completion transactions are not processed in order of the transaction number, but by completion type as follows.

Scrap completions with a cost entered

Other scrap completions

Nonscrap with parent item different from the completion item and a parent quantity equal to 0 (a by-product)

Other nonscrap completions

For more information, see:

Completion Calculations

Scrap Completions