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written by | March 9, 2022

Materials Consumption Summary in Tally

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The materials consumption report is a document used in the manufacturing process to summarise the items used over the course of a given accounting period. To put it in more simple words, the materials consumption report keeps track of how much raw materials and commodities in the process are utilised to make products over time, such as a week, month, or quarter.

Companies with a consistent manufacturing line frequently prefer to use this report than using a materials procurement form. However, both approaches accomplish the same goal. They keep track of how much raw inventory was used in the manufacturing process so that the storage manager can acquire more or deliver existing inventory to the production line. The cost of materials consumed in production is also assigned accordingly, using the consumption report. This is accomplished by transferring the cost of the raw materials utilised to the new cost of the goods in the process via a journal entry.

What is Material Consumption Summary

Let us consider a hypothetical example to understand what is material consumption summary. The cost of a steel bar is recorded in a raw materials account when a factory procures it. The steel bar is stored in storage until it is required by the production process. Steel is transported to the assembly line once a materials consumption report or materials demand form is delivered to the storage manager. The whole cost or a fraction of the overall cost is allocated to the newly generated items in the process, depending on how much of the stock is utilised.

After that, a material consumption report is utilised to indicate how much raw material is used to make the finished product. This process repeats itself over and over again. It might happen multiple times each hour, depending on the organisation. Take, for example, the Pepsi Bottle Company. Their bottles are made 24 hours a day, seven days a week.

Also read: Know About Receipts and Payments Report in Tally

Material Consumption Summary in Tally

Material Consumption Summary is a godown-by-godown summary that shows how much stock has been consumed for a specific project or task.

Generation of Material Consumption Summary Report:

Given below are the various steps involved to generate a report of material consumption:

  • Go to Gateway of Tally> Display> Statement of Inventory> Job Work Analysis and press Enter in the field consumption to drill down.

The same has been displayed in the below images.

How can we configure material consumption summary:

Press F12 for configuration.

You need to enable the following options:

·        Show Goods Inwards-Yes

·        Show Goods Inwards in detail-Yes

·        Show consumption-Yes

·        Show goods consumption in detail-Yes

Also read: How to Enter Sales Return Entry in Tally ERP 9?

Detailed Material Consumption Summary Report:

The detailed material consumption summary report is shown in the following image:

The following are the details included in the Material Consumption Summary:

Inwards:

Purchase: The value of the materials consumed in the underlying project is reflected here 

Manufacturing Journal: Under Inwards, the value of materials created by sending Manufacturing Journal voucher tagging to the relevant godown is displayed.

Inter Project Transfer:  This shows the value of the transfer entry created by using the 'Class' established for 'Stock Journal' and tagging to the relevant godown.

Other Transfers: Transfers other than above which are done by NOT using the Transfer Class created for Stock Journal is shown here

Consumption:

Cost of Sales: It is the number of products sold multiplied by the cost of purchase. This is where the value of sales reported in an item invoice is shown.

Job Consumption: The value of the entries created for Stock Journal using the 'Consumption Class' is presented here.

Outwards:

Manufacturing Journal: The materials that are consumed or used in the job or the project are shown here. They are shown through the manufacturing journal voucher entry.

Inter Project Transfer: This shows the value of the transfer entry created by using the 'Class' established for 'Stock Journal' and tagging to the relevant godown.

Other Transfers: Transfers other than above which are done by NOT using the Transfer Class created for Stock Journal is shown here

Closing Stock: It is determined using the costing method. It is given by the following formula-

Opening value+Inwards-Consumption-Other Transfers

Material Consumption Stock Summary:

The material consumption stock summary can be viewed by clicking enter on the material consumption summary. When we drill down further the Godown Voucher screen shows. The same has been shown in the images below:

Also read: All About Banking Entry In Tally ERP 9

Total Material Consumption of all jobs:

For viewing the total material consumption of all the jobs the button auto column is available. Click on N: Auto Column. In repeat, using the job/project needs to be selected. In the show total column yes needs to be selected. In the option, Show Total C, you have to select ‘yes’.

The material consumption summary is shown in the image below:

For selecting another project, click N: New Column.

Also read: Tally ERP 9: What Is It and How Can I Use It?

Conclusion:

The material consumption report is an important report as it informs about the actual material consumed in making the finished product. The article has talked in detail about how a material consumption report can be generated in tally along with the details of the components of the report as well as the various other features of the report. Tally users can also use the Biz Analyst App to manage the business more effectively. You can manage the accounts, make ledgers, and even do data entry to keep the business on the right track.

FAQs

Q: How can we configure material consumption summary?

Ans:

Press F12 for the configuration of the material consumption summary.

Q: How can the total material consumed for all jobs be viewed?

Ans:

For viewing the total material consumption of all the jobs the button auto column is available. Click on N: Auto Column. In repeat using the job/project needs to be selected. In the show total column yes needs to be selected.

Q: What do you mean by cost of sales?

Ans:

Cost of Sales is the number of products sold multiplied by the cost of purchase. This is where the value of sales reported in an item invoice is shown.

Q: How is closing stock determined?

Ans:

Closing Stock is determined using the costing method. It is given by the following formula-

Opening value+Inwards-Consumption-Other Transfers

Q: What are the steps involved in the generation of the Material consumption report summary?

Ans:

The following steps need to be followed

Go to Gateway of Tally> Display> Statement of Inventory> Job Work Analysis and press Enter in the field consumption to drill down.

Q: What do you mean by material consumption report?

Ans:

The materials consumption report keeps track of how much raw materials and commodities in the process are utilised to make products over time, such as a week, month, or quarter.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.