We have say 2 projects: Pr. 1 and Pr 2. We have two warehouses, one for each project, say W1 and W2 respectively for Pr.1 and Pr.2.
Lets say we order 100 units of item A @ price 100/unit (landing cost) in Warehouse 1, for use in Pr.1. For some reason we have to relocate 20 units of that item to Warehouse 2 for use in Project 2. During this transfer a transportation cost of 500 total.
Our workflow:
We create a material transfer request: source warehouse is 1 and target is 2.
When creating stock entry from that Material transfer (by clickig on Transfer Material as in image), we add additional cost (as shown in image)
As project A first purchased 100 units @ 100/unit, total cost is 10,000… Now when 20 units are transferred, total cost of project A for this item should be reflected as 8,000 only. The cost at Project 2 must be shown as 2,000 + transfer cost which is 500. How is the cost of item A for Project 1 and project 2 reflected in accounting ? How can we verify this has been done ?
Do we have to make a separate payment entry/journal entry against this material transfer ?
Cost of the material will reflect in your P & L when you consume the material. At the time of consumption use the correct project code to get the correct project costing.
In your current case material is in the stock and it will reflect in your stock account in trial balance. When you consume the 20 Pcs transferred from Project A in the Project B, total cost Purchase Cost + Transportportation of 500 will added to cost of Project B.
When creating a material transfer, from the MT request, I can add the associated transportation cost. However how does it get booked in any account when I have not yet made any entry? The system yet doesn’t know who I paid that 500 for transportation.
