Re: BOM900 - Impact of NOT Running?

[zieske@xxxxxxxxxxxxxxxxxx]

Their are dangers in incorrect low-level codes even for cost roll-up, The
purpose of the low-level code is to control the order in which parts are
processed. In your case it is to make sure that you do not roll the costs of
components into a parent item before you have 'rolled-up' the cost of the
component. Example component C goes into Assembly A. C carries a pre-rollup cost
of 10 cents. If A is processed before C, then 10 cents is what rolls into the
cost of A. If C is later rolled up in the same run and produces a cost of 12
cents, you effectively have a 2 cent error on your cost of Assembly A. The
problem with this error is that it is almost impossible for even the most eagle
eyed accountant to notice a problem.

However problems can mount. Every time you issue C to a shop order for A, WIP
gets incremented at 12 cents apiece. When you receive the finished good, A is
missing 2 cents in its cost that will never be relieved from WIP.

I'm not an accountant so your milage may vary.


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