Production orders are used to record manufacture of finished inventory items using existing inventory and other resources. For example, manufacturing bottled fruit juices requires fruits, bottles, and lids purchased from suppliers as inventory items. These inventory items can be converted into the finished products sold to customers.
Finished goods must be created as separate inventory items before they can be entered on production orders.
To record a production order, go to the Production Orders tab and click New Production Order:
Complete the entry screen:
Datewill be autofilled with today’s date, but may be edited.
Referenceis automatic. Manager will find the highest existing
Referencenumber and add 1.
Descriptioncan be any text useful for describing the production order.
Bill of materials. If more than one inventory item is used, click Add line to add more line items.
Locationof the finished item(s) can be selected if inventory locations have been defined.
Click Create to save the production order.
If non-inventory costs, such as wages, consumables, or overhead allocations are required to produce the finished inventory item(s), check the box to
Add non-inventory cost into production. Enter accounts to which the costs will be posted and the amounts. Add lines if necessary:
Manager will add the non-inventory costs to the current average cost of inventory item(s) consumed by the production order to calculate the cost of the produced inventory item(s).
In the Inventory Items tab, the quantity of the manufactured inventory item will increase while the quantities of input inventory items will decrease by the quantities included in the production order.
Brilliant Industries creates a production order to build three table lamps for its north warehouse. Each lamp uses one of each of three other parts in stock. Brilliant also includes 75.00 worth of manufacturing labor in the cost of the three lamps (25.00 each):
The Production Orders tab summarizes the order: