E1: 43: PO Receipts (P4312) Incorrectly Calculates Standard Cost Variance on a Transfer Purchase Order (OT) if the Potency Different Than Standard Potency (Doc ID 2863078.1)

Last updated on APRIL 17, 2024

Applies to:

Symptoms

When the Potency of the Lot Shipped on a Transfer Order (ST/OT) is different than the standard potency, the PO Receipts (P4312) program will create a Standard Cost Variance in the Item Ledger (F4111) and General Ledger (F0911) for the OT Receipt.

The ST shipment in the From Branch will NOT have a Standard Cost Variance in the Item Ledger (F4111) and General Ledger (F0911). 

As a result, the Item Ledger (F4111) and General Ledger (F0911) will show a different financial amount received in Inventory in the To Branch than the financial amount shipped out of Inventory in the From Branch. This is the case even when the To and From Branch are in the same company.

The screen print below shows that the shipment out of the "From" Branch subtracts 3.00 from the G/L Inventory Account 1.1411 in Company 00001 and the receipt in the "To" branch adds 2.50 to the G/L same Inventory Account 1.1411 in Company 00001.

Setup:

1. Create item master (P4101) for item # 799158 - See that customer has Inventory and Sales Cost Level set to value “2”, Item/Branch Only
   1. Set Additional System Info – Grade and Potency TAB – Standard Potency 25.00
   2. Set Primary Unit of Measure to KA (Kilograms Active)
   3. Set Secondary UoM to KG (Kilograms)
   4. Item unit Of Measure (UoM) Conversion: 1 KA=1 KG
2. Create two Item Branch records (P41026) for Item # 799158 for Branch 30 (From Branch) and Branch 10 (To Branch)
   
   1. Set Additional System Info – Grade and Potency TAB – Standard Potency 25.00 on both Item Branch Records
3. Set the Item Cost (P4105) to Standard (07) Cost for 10.00 per KA for both Sales Inventory Cost and Purchasing Cost on "From" Branch 30 and "To" Branch 10
4. Perform an Inventory Adjustment for Item 799158 In Branch 30, for a specific Lot Number for 10.00 KA with Potency = 30.00 which exceeds the standard potency of 25.

Steps:

1. Create Sales Transfer (ST/OT) order (P4210 ZJDE0007) From B/P #30 To B/P #10 for Item 799158. 
   1. Enter 1 KG as transaction quantity and UOM.
   2. Sales Order (ST) is assigned a Unit Price of $10.00 with Extended Price = Qty *(Unit Price * (Default Potency/100) = 1*(10.00 * (25/100) = 2.50
2. Inquire on the Purchase Order (OT) (P4310 ZJDE0018)
   1. Unit Cost of $10.00 and Extended Cost of $2.50 matches Unit Price and Extended Price on Sales Order (ST)
3. Ship Confirm (P4205) the Sales (ST) order by assigning Lot the Lot with the Potenct of 30
4. Customer Service Inquiry (P4210) shows that Ship Confirm (P4205) re-calculated the Extended Price = Qty * (Unit Price * Lot Potency/100) = 1*(10.00 *(30/100) = 3.00.
5. Check Item Ledger (P4111) after Ship Confirm (P4205).
   1. Quantity subtracted from Branch 30 = -1
   2. Extended Cost Subtracted = -3.00
   3. No record was created for a Standard Cost Variance
6. Process the Sales Order (ST) through Sales Update (R42800)
   1. The G/L Inventory Account (1.1411) was Credited for -3.00
   2. No record was created for a Standard Cost Variance
7. Receive the OT order (P4312 ZJDEB0002) into B/P #10, using the Lot # that was shipped, and the Lot Potency of 30%.
8. Check Item Ledger (P4111) after PO Receipt (P4312)
   1. Quantity Added to Branch 10 = +1
   2. Extended Cost Added to Branch 10 = +3.00 (564230/OV) which is for the recalculated PO Receipt
   3. Standard Cost Variance Subtracted for Branch 10 = -0.50
9. Check Journal Entries for OV Receipt.
   1. The G/L Inventory Account (1.1411) was Debited for +2.50
   2. The Standard Cost Variance Account 10.6350 was Debited for +0.50

Changes

Cause

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