Production costing

I've been asked with material to understand production posting, and as I'm not an accounting people I found it very difficult to understand from the beginning (and still now) but I made this model for myself, bulletproof I belive, and could be applied for simmilar circumstancies for other modules and situations. In this particular example, as requested by K.Lally, I'll use a short production tipical process.

1. Create one account for each field of the Ledger-Items in the Production Group (Production\Setup\Production\Production groups) of the item you are going to use in the test. Consider that the account name, is the same name of the field, that will make it easy to track.
   Finally assign each one of them to the appropiate field.
   
2. Now maybe some of you already knows what I'm going to do. Create a production order for an item that has been assigned with this production group.
3. In this case when I Start the production order, I will automatically consume the BOM. After that, export the Chart of accounts results (General\Export to Excel), filtered for the accounts created to an Excel spreadsheet like this.
   
4. Next step is the Report as finished. After posting it, I will do the same with the chart of accounts, but placing the values in the next column of previous Excel.
   
5. Now the End step
   

In this way it is easy to see how the amounts are moved between accounts after each step.

I made for myself a wider example, starting with materials reception of a purchase order, and where a semi-finished product was part of other BOM, so I made all the production steps for the semi-finished product (with other production group accounts set) and then the final product (other production group account set), with this method I managed to see after every transaction, where (to which accounts) the amount were moved by AX in that way I could understand it in a very graphical way, and the accounting people also.

It is better if you select the whole chart of account, so you can also see the inventory accounts, etc. It is very useful to have a test company where you can delete transactions every time you start a new cycle.