Manufacturing

There are industries which use common raw materials to manufacture multiple finished goods. In this case Raw
materials will be issued from the godown to production floor for the manufacture of multiple finished goods
(with or without by-products).

In Tally Prime, multiple finished goods manufacture (with or without by-products) can be recorded using Expenses

Example: On 1-04-2020 Dell Enterprises Manufactured Computer of Brand Lenovo and IBM using common Raw
materials (Monitor, Hard Disk, Keyboard, Mouse, Monitor, Motherboard, Ram, others)

Manufacturer is a person who actually manufactures, i.e. one that actually brings into existence new and
identifiable product.

Usually, Pharmaceutical companies, chemical industries etc., need to maintain their stock items with
manufacturing dates and expiry dates. In Tally Prime, you can Maintain Batches with Mfg
(Manufacturing) and Expiry dates.

Name of Product
Select the product which needs to be manufactured from the List of Items. The Item selected in Name of Item
field will be the primary Item which will be manufactured using different components.

Manufacturing date & Expiry date for Batches

This feature is useful for businesses that deal in goods that have expiry dates like medicines, food and other
perishables. During voucher entry, the date of the voucher is taken by default as the date of manufacture of the
product. This can be changed but not to a date later than the voucher date. Expiry date cannot be a date prior to
the voucher date.

Bill of Material

A Bill of Materials is a list of constituent items along with quantity details that can be allotted for the manufacture
of a certain product, by-product or likewise. This facilitates immediate reduction in stock of the item
automatically. This process of listing the items that make up another item is made possible in Tally by enabling
the Bill of Materials Facility.
Bill of Material (BoM) is created only for those items that are being assembled in-house. Therefore, you need to
specify a BoM at the time of creating a Stock Item or while altering the stock item. For trading items, you do not
need a BoM.

Name of Product
Select the product which needs to be manufactured from the List of Items. The Item selected in Name of Item
field will be the primary Item which will be manufactured using different components.

BOM Name
Select the Bill of Material if you want the components utilized to manufacture the finished goods to be displayed
automatically.
Note: If BOM is selected the Components used for the manufacture of finished goods
& the By-Products/Co-Products or Scrap produced during manufacturing will be
defaulted.
For more details on creating BOM & recording Manufacturing Journal using BOM refer the topic - Creating Bill of
Materials for a Stock Item
Godown
Select the godown where you would like to place the produced goods.

Quantity
Enter the quantity to be produced.

% of Cost Allocation
This field displays the Percentage of Cost of Allocation to the Primary Item manufactured.
Note: In a manufacturing process if there are no by -Products/co -products or scrap
produced then the % of Cost of Allocation to Primary Item will 100%.

If there are any by-products/Co-products or scrap is manufactured then the % of Cost of

Allocation to primary item will be Total Cost - Cost allocated to By Products /Co Products
/Scrap.

Batch Name, Mfg Date, Expiry

If the item to be manufactured in batches then enter the Batch Name, Manufacturing Date and Expiry Date.

Components (Consumption)
The list of Sub-Component items which will be used to produce the finished goods, need to be selected here.
1. Name of Item: In this field select the components used for the manufacture of finished goods.

2. Godown: In this field select the Godown from where the components are consumed for
production.

3. Quantity: In this field mention the Quantity of Raw materials required to manufacture the
finished goods.

4. Rate: In this field mention the rate (purchase cost) of the raw materials used in the manufacture
of finished goods

5. Amount: In this field the Amount will be calculated automatically based on Quantity & Rate of
item

Co-Products/ By-Products /Scrap

The list of By-products/ Co-products or Scrap produced during the manufacture of finished goods need to be
selected here
1. Name of Item: In this field select the By-product/Co-product/Scrap name which is produced in
the process of manufacture of finished goods

2. Godown: Select the godown where the By-product/Co-product/Scrap produced will be stored

3. % of Cost Allocation: In this field specify the % of cost of allocation to be made towards the By-
product/Co-product/Scrap produced

4. Quantity: In this field mention the Quantity of By-product/Co-product/Scrap produced

5. Rate: This is the rate of producing of By-product/Co-product/Scrap. (Rate = Amount/Quantity)

Rate will be displayed automatically
 6. Amount: Amount will be displayed automatically based on the % of Cost Allocation defined for
the By-product/Co-product/Scrap produced. TallyPrime calculates the % of Cost Allocation on
Effective Cost

In the above example: Amount of By-Product 1(5,050) = 20,20,000 (Effective Cost) X 0.25\100 (%
of Cost Allocation)

Cost of Components
This field displays the total cost of the components (raw materials) used in the manufacture of finished goods.

Type of Addl. Cost

Enter the additional cost incurred for manufacturing the finished goods, if any.

Total Addl. Cost

The total of all additional cost will be displayed here.

Effective Cost
The Effective cost is total of Cost of Components (Consumption) + Additional Cost incurred to manufacture the
finished goods & Co-Product/By-product or Scrap
In the above example: 20,00,000 + 20,000 = 20,20,000 is incurred manufacture Item B (Primary Item), By-Product
1 & Scrap

Allocation to Primary Item

The cost allocated to manufacture the Primary Item will be displayed in this field.
Allocation to Primary Item = Effective Cost - Total cost of Co-products/By-Products/Scrap

Effective Rate of Primary Item

This is the rate of the Primary Item Manufactured (finished item).
In the above example: 20,08,890 / 2000 (number of Item B produced) = 1004.45/nos.

Manufacture of Finished Goods without By-Product/Co-Product/Scrap

In some manufacturing processes, only finished goods will be produced without any By-product/Co-
product/scrap. In those cases, users may not need the provision to move to By-Product/Co-product/scrap section.
You can configure the movement of cursor to By-Product/Co-product/scrap section.

In case, where you don't have By-Product/Co-product/scrap details, then you can configure the Manufacturing Journal
to skip the movement of cursor to that section.
 Name of Company Type of Company Financial Year Book Beginning Date

1 Dell Enterprises Accounts With Inventory 1 April 2020 1 April 2020

Nature of Company Study The following Points

1
2
Features Activate the Following Features by using F11 Activate Key
F1 Account Features Activate the Following Features by using F11 Activate Key Activate
Integrated Accounts and Inventory Yes
Maintain Bill wise Details Yes
Activate Interest Calculation Yes
Use Advance Interest Calculation Yes
Maintain Cost Centers Yes
Allow Invoicing Yes
Enter Purchases in Invoice Format Yes
Use Debt /Credit Notes Yes
Use Invoice Mode for Credit Notes Yes
Use Invoice Mode for Debit Notes Yes
Use Predefined Cost Center Allocations during Entry Yes
F2 Inventory Features Activate the Following Features by using F11 Activate Key Activate
Integrated Accounts and Inventory
Maintain Multiple Godown
Maintain Stock Categories
Maintain Batch wise Details
Set Expiry Date for Batches
Allow Purchase Order Processing
Allow Sales Order Processing
Use Tracking Numbers (Delivery Notes / Receipt Note)
Use Tracking Numbers (Use Rejection Inward /Outward)

Account Master Create the Following Account Master

Group Create the following Groups
Sr Name of Group Under Special Activation
Alter Direct Expenses Groups and change following Options
1 Direct Expenses Primary Groups Groups Behaves like a Sub Ledgers—Yes
Appropriate by Quantity—Yes
Ledger Create the following Ledgers ALC
Sr Ledger Under Activation
1 Purchase Purchase Inventory Value are Affected- Yes
2 Sales Sales Inventory Value are Affected- Yes
 3 Equity Shares Capital Capital Activate Cost Center-Yes
4 HDFC Bank Bank
5 Rent Allow Indirect Expenses
6 Salary Allow Indirect Expense Activate Cost Center-Yes
7 Carriage Direct Expenses
8 Packing Charges Direct Expenses
9 Wages Direct Expense
10 Dell Enterprises Sundry Creditors
11 Sahara Enterprise Sundry Creditors
12 Royal Computer Sundry Debtors
13 Max Technology Sundry Debtors
Voucher Create the following Vouchers AVC
Sr Voucher Name Under Class Exclude Include Ledger
1 Credit Pur Purchase Credit Purchase Sundry Creditor Purchase
Default Accounting Allocations for Each Item in Invoice
Rounding Overing using item
Ledger Name Tax Class Percentage Rounding Limit
Method Default?

Additional Accounting Entries (e.g. Taxes / Other Charges ) to be Added in Invoice

Rounding
Ledger Name Type of Cal Value Basis Rounding Limit Remove if Zero
Method
N.A 0 0
Default Accounting Allocations for Each Item in Invoice

2 Credit Sales Sales Credit Sales Sundry Debtors Sales

Default Accounting Allocations for Each Item in Invoice
Rounding
Ledger Name Type of Cal Value Basis Rounding Limit Remove if Zero
Method

Additional Accounting Entries (e.g. Taxes / Other Charges ) to be Added in Invoice

Rounding Overing using item
Ledger Name Tax Class Percentage Rounding Limit
Method Default ?
Sales 0 0

Inventory Master Create the Following Account Master

Stock Groups Create the Following Under Groups IGC
Sr Name of Group Under Special Activation
Raw Material Primary
Finished Goods Primary

Stock Unit Create the following Under Unit IUC

Sr Type Symbol Formal Name Number of Decimal Places
 Simple Nos Numbers 0
Stock Godown Create the Following Godown IGC
Sr Name of Godown Under Special Activation
1 Raw Material Godown Primary Address
2 Production Godown Primary Address
3 Finished Godown Primary Address

Stock Item Create the Following Stock Stock Item IIC

Sr Item Under Special Activation
1 Cabinet Raw Material -
2 DVD Writer Raw Material -
3 Hard Disk 1 TB Raw Material -
4 Keyboard Raw Material -
5 Monitor Raw Material -
6 Mother Board Raw Material -
7 Mouse Raw Material -
8 Processor I3 Raw Material -
9 RAM (4GB) Raw Material -

Pass the Following Voucher Entry and Preview the Basic And Advance Reports after Passing Every Voucher Entry
1 Being Personal Equity Shares Transfer to Business as per Ratio 40:40:20
Particulars Debit Amt Credit Amt
HDFC Bank Dr 2000000
To Equity Shares Capital Cr 2000000
Pawan Capital - 800000
Gaurav Capital - 800000
Manav Capital – 400000
Chq No Narration :

1 Purchase Following Raw Material From Crystal Corporation on 10 days Credit Period Bill-001
Name of Item Godown Qty Rate T.D Value
Cabinet Raw Material Godown 50 1200
DVD Writer Raw Material Godown 50 1100
Hard Disk Raw Material Godown 50 2400
Keyboard Raw Material Godown 50 350

2 Given Purchase Order of Following Raw Material to Sahara Enterprises With Due Date 02/04/2020 PO/001
Name of Item Godown Qty Rate T.D Value
Monitor Raw Material Godown 50 4,800.00/Nos 2,40,000.00
Mother Board Raw Material Godown 50 3,000.00/Nos 1,50,000.00
 Mouse Raw Material Godown 50 250.00/Nos 12,500.00
Processor I3 Raw Material Godown 50 3,200.00/Nos 1,60,000.00
RAM (4GB) Raw Material Godown 50 1,500.00/Nos 75,000.00

3 Material Received From Sahara Enterprises Agaist PO/001 Dated 02/04/2020 GRN/001
Name of Item Godown Qty Rate T.D Value
Monitor Raw Material Godown 50 4,800.00/Nos 2,40,000.00
Mother Board Raw Material Godown 50 3,000.00/Nos 1,50,000.00
Mouse Raw Material Godown 50 250.00/Nos 12,500.00
Processor I3 Raw Material Godown 50 3,200.00/Nos 1,60,000.00
RAM (4GB) Raw Material Godown 50 1,500.00/Nos 75,000.00
3 Purchase Invoice From Sahara Enterprises against GRN/001 With Payment Due Date 15/04/2020 Bill - 002
Name of Item Godown Qty Rate T.D Value
Monitor Raw Material Godown 50 4,800.00/Nos 2,40,000.00
Mother Board Raw Material Godown 50 3,000.00/Nos 1,50,000.00
Mouse Raw Material Godown 50 250.00/Nos 12,500.00
Processor I3 Raw Material Godown 50 3,200.00/Nos 1,60,000.00
RAM (4GB) Raw Material Godown 50 1,500.00/Nos 75,000.00

4 Being Cash Withdrawal From HDFC Bank for Business Use

Particulars Debit Amt Credit Amt
Cash Dr 200000
To HDFC Bank Cr 200000
Ref No Days Amt

Chq No Narration :

5 Being Following Goods Transfer From Unfinished Goods Godown to Production Godown
Outward Godown Inward Godown
Raw Production
Qt
Name Materia Rate Value Name Godown Qty Rate Value
y
l
Raw Producation
Cabinet Material 40 1,200 /Nos 60,000 Cabinet Godown 40 1,200 /Nos 60,000
Godown
Raw Producation
DVD
Material 40 1,100 /Nos 55,000 DVD Writer Godown 40 1,100 /Nos 55,000
Writer
Godown
Raw Producation
Hard Disk Hard Disk 1
Material 40 2,400 /Nos 1,20,000 Godown 40 2,400 /Nos 1,20,000
1 TB TB
Godown
Raw Producation
Keyboard Material 40 350 /Nos 17,500 Keyboard Godown 40 350 /Nos 17,500
Godown
Raw Producation
Monitor Material 40 4,800 /Nos 2,40,000 Monitor Godown 40 4,800 /Nos 2,40,000
Godown
Raw Producation
Mother Mother
Material 40 3,000 /Nos 1,50,000 Godown 40 3,000 /Nos 1,50,000
Board Board
Godown
Raw Producation
Mouse Material 40 250 /Nos 12,500 Mouse Godown 40 250 /Nos 12,500
Godown
Raw Producation
Processo Processor
Material 40 3,200 /Nos 1,60,000 Godown 40 3,200 /Nos 1,60,000
r I3 I3
Godown
Raw Producation
RAM
Material 40 1,500 /Nos 75,000 RAM (4GB) Godown 40 1,500 /Nos 75,000
(4GB)
Godown
10 Produce the Following Finished Goods From Raw Material And Material Store in Raw Material Godown
Manufacture of Raw Material
Production
Name of Product Computer Lonova Godown Qty : 30
Godown
Batch Name CL\200410\01 Mfg Date : 10-04-2020
Components (Consumption) Cost of Components
Name of Item Godown Qty Rate Amt
Production Wages 6000
Cabinet 30 1,200 /Nos 36,000 Overhead 3000
Godown
Production 30
DVD Writer 1,100 /Nos 33,000
Godown
Hard Disk 1 Production 30
2,400 /Nos 72 ,000
TB Godown
Production 30
Keyboard 350 /Nos 10,500
Godown
Production 30
Monitor 4,800 /Nos 1,44,000
Godown
Mother Production 30
3,000 /Nos 90,000
Board Godown
Production 30
Mouse 250 /Nos 7500
Godown
Production 30
Processor I3 3,200 /Nos 96,000 Total Additional Cost : 9000
Godown
Production 30
RAM (4GB) 1,500 /Nos 45,000 Effective Cost : 543000
Godown
270 534000 Effective Rate : 18100
15 Sold Finished Goods to Max Technology on 10 Days Credit Period and Material Send From Finished Goods Godown
Bill No/001
Name of
Godown Qty Rate Value Batch Details Mfg Date Warranty
Item
Computer Finished
05 25000 250000 CL\200410\01 10/03/2018
Lenova Godown

22 Received Sales Order From Royal Computer For Goods Supply in the Futures SO/001
Name of
Godown Qty Rate Value Batch Details Mfg Date Warranty
Item
Computer Finished
20 25000 250000 Any - -
Lenova Godown

24 Goods Delivered Against Sales Order SO/001 and Material Send From Finished Goods Godown DC/001
Name of
Godown Qty Rate Value Batch Details Mfg Date Warranty
Item
Computer Finished
20 25000 250000 CL\200410\01 10-04-2020 1 Years
Lenova Godown

27 Sold Finished Goods to Royal Computers on 10 Days Credit Period Against DC/001 and Material Send From Finished Goods
Godown Bill – DE/001
Name of
Godown Qty Rate Value Batch Details Mfg Date Warranty
Item
Computer Finished
20 25000 250000 CL\200410\01 10-04-2020 1 Years
Lenova Godown
30 Being Cash Withdrawal by Petty Cashier From Business Bank Account Rs 80000/-
Particulars Debit Amt Credit Amt
Petty Cash Dr 80000
To HDFC Bank Cr 80000
Narration : Ch No 225844

30 Being Salary Paid to Employee Rs 10000

Particulars Debit Amt Credit Amt
Salary Dr 50000
Name of Cost Center Value Dr
Dinesh 12000 Dr
Rahul 10000 Dr
Prashant 10000 Dr
Vikas 8000 Dr
Chetan 10000 Dr
To Petty Cash Cr 50000
Narration :

30 Paid Rent Expenses to Landlord For the Month April Dated 00/00/17
Particulars Debit Amt Credit Amt
Rent Dr 20000
To Petty Cash Cr 20000
Narration :