In this task you will restructure your direct labor and manufacturing overhead accounts as Cost of Sales accounts for absorption costing.
Links:
Financial Transfer Guide - Labor and Overhead Setup
Screen Help - Chart of Accounts
You will be adding and cross referencing 4 Absorbed Costs accounts to your financial accounting general ledger
1.Absorbed Labor
2.Absorbed Mfg Overhead
3.Absorbed Subcontract Cost
4.Absorbed Misc Cost
You will reorganize your Chart of Accounts to Isolate your direct costs for production workers and manufacturing overhead
One of the new concepts that DBA brings to the table is absorbed accounting for your Labor and Manufacturing Overhead. In your accounting setup, you will be organizing your chart of accounts cost of sales section, so you can more easily isolate your costs for your production workers and the costs that you designate as manufacturing overhead. This reorganization will help align your income statement to more properly handle your absorbed costs. These costs will also be used to periodically update your calculated Shop Rates (BOM>Shop Rates) so that you get a more accurate reflection of your Labor and Manufacturing Overhead costs in the items that you manufacture.
