In our production process we often ship or consume inventory while the Production Order is in progress. As more quantities are produced, the cost of each production gets updated over time. However, the consumption and shipping inventory movements are not updated with the latest cost, causing inaccuracies in our production costs.
Example:
1 unit produced on day 1, with cost 10
this unit was consumed in day 2, with cost 10
1 additional unit produced on day 3, with cost 5
this results in an average cost of 7.5 for each unit
this additional unit was consumed in day 4, with cost 7.5
in the end, the inventory value is not accurate because the unit consumed in day 2 was consumed with cost 10, instead of 7.5
The only way to have accurate data is ensure that intermediary goods are consumed in the final assemblies after the Production Orders for those intermediary goods have been completed, which is not feasible for us.
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