When is AAI 4337 used?

[Nancy_x]

Hi,

When we enter Purchase Order Receipts, it creates a variance using DMAAI 4337. I would like to know in what situation the DMAAI 4337 will be used.

In the JDE documents, it says:
4337 Journal entry debit to a manufacturing material burden
account that is created from the Purchasing Receipts
program. (Used in conjunction with standard costs.)

Thanks

 

[Regis]

The AAI 4337 is used when the Item Ledger cost is different from the frozen costs based on the costs components. You use this AAI when you purchase a manufactured item with a purchasing cost method different from 07.

 

[Nancy_x]

Thanks, Reqis,

I don't think we bought manufactured items, but I'm not sure, perhaps engineer made a mistake.

I did a test in DEMO, you are right, when I was entering receipt for a manufactured item, AAI 4337 was required. But I'm not sure how it is calculated. For example, I buy one 220(item number) for 800 dollars, and the standed cost is 527.88, after I entered the receipt, I got a journal:
527.88 Inventory
-800.00 Received Not Vouchered
434.17 Purchase Part Variance
-162.05 material burden

I checked the frozen cost of 220, it is 527.88, and the components are below:

CostType Description SimulatedNetAdded SimulatedTotal
A1 Material 365.4483
A2 Scrap 2.3206
B1 Direct Labor 35 82.6837
B2 Setup Labor 0.695
B3 Machine Run 10.9473
C1 Machine Variable Overhead 0.9664
C2 Machine Fixed Overhead 0.9664
C3 Labor Variable Overhead 8.75 19.5017
C4 Labor Fixed Overhead 8.75 19.5017
D1 Outside Operation 5
X5 R&D 5 5

Could you tell me how the material burden is calculated?

Best Regards,

Julia

 

[Tim Lyons]

Hi, Julia,

AAI 4337 accounts for Material Burden, which provides a way to account for the cost of an item beyond the actual purchase price if you are not using Landed Cost functionality. You can download document ODS-00-0130 from the KG/Customer Connection that explains it fairly thoroughly and describes the setup.

 

[Nancy_x]

Hi, Tim

Thank you for your help.

Regards