Manufacturing_Process_Costing_Odoo_Recorded
# CostingManufacturingProcessRecorded

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Manufacturing Process Costing –  Flow

1. Sales & Demand Initiation

  • Create Sales Order
  • Confirm demand for manufactured product

2. Bill of Material (BoM) Definition

Define detailed cost structure in BoM:

A. Standard Cost Components

  • Direct Material Cost
  • Direct Labor Cost
  • Direct Overhead Cost

B. By-Product Cost Allocation (if applicable)

  • Direct Material Cost (By-Product)
  • Direct Labor Cost (By-Product)
  • Direct Overhead Cost (By-Product)

Ensures accurate cost distribution across main and by-products

3. Manufacturing Order Creation

  • Generate Manufacturing Order (MO) from Sales Order or manually
  • Select Process Costing Accounting Template
    • Controls how accounting entries will be posted
    • Defines cost allocation logic

4. Work Order Execution

  • Create Work Orders from MO
  • Assign operations and work centers

5. Shop Floor Data Capture

  • Record actual quantities (material, labor time, overhead usage) in Work Orders
  • Data automatically updates in:
    • Manufacturing Order
    • Costing calculations

This ensures real-time actual costing vs planned costing

6. Process Costing Report Generation

  • Print Process Costing Report
  • Review:
    • Planned vs Actual Cost
    • Cost per unit
    • Stage-wise cost accumulation

7. Shop Floor Completion

  • Finalize production:
    • Update actuals (materials consumed, labor hours, overheads)
    • Mark Work Orders as done
    • Close Manufacturing Order

8. Accounting & Cost Validation

  • Review Accrual/Accounting Entries
    • WIP (Work in Progress)
    • Finished Goods valuation
    • Variance postings

9. Product Cost Update & Analysis

  • Check Product Cost Price on product form
  • Validate:
    • Actual Cost vs Standard Cost
    • Variance analysis

End Result

  • Accurate process-wise costing
  • Real-time shop floor tracking
  • Proper financial impact (WIP → Finished Goods)
  • Visibility on cost variances and profitability