Operations expenses

Hi,
I am currently exploring manufacturing module, it seems good except for operations part.
However I have a question regarding operations expenses.
I have done the following:
1- Created a BOM for PC product with sub-materials(CPU and Hard Disk) and specified “With Operations”
2- I Have added only one operation in the BOM
3- Created new production order
4- Assigned order to a project name
5- Made stock entry for sub-materials using “Transfer Material for Manufacturing” button and used project’s cost center
6- Submitted operation time log
7- Made stock entry for finished good using “Update Finished goods” button and used project’s cost center too.

The problem is that I can see that “Expenses Included In Valuation” expense account is credited while, by definition, expenses increases by debit not credit.
When later making a credit note( delivery order) for finished good, “Cost of Goods Sold” expense account is debited.
when generating Profit and loss report both accounts subtracts each other as one is debited and the other is credited.

The questions are

  • Why “Expenses Included In Valuation” is credited?
  • What is the best way to generate profitability report for manufacturing project noting the above behavior?
  • Why Sub-materials are not expensed when used in manufacturing order and the only expenses generated are operations cost and when delivery note are made for finished good?

Hope that the above is clear.
Thanks for your time and waiting for your kind support.

1 Like

Can’t anyone help with that?
Should I provide more details to help?
@shraddha
@rmehta

Thanks

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