# HAV Seafood — Inventory Costing & Manufacturing Accounting Architecture

## Purpose

`hav_seafood_finance_inventory_costing_manufacturing_accounting_v1.xlsx` defines the static **Inventory Costing & Manufacturing Accounting Architecture** for **HAV Seafood**.

The workbook translates the physical Production, Procurement, Supply Chain and HR architecture into a controlled Finance interpretation for:

- inventory valuation;
- item costing methods and profiles;
- purchased-material cost treatment;
- landed-cost treatment;
- manufacturing cost components;
- BOM and routing costing;
- standard labor and work-center costing rates;
- manufacturing overhead absorption;
- yield, scrap, normal loss and by-product treatment;
- inventory and manufacturing posting rules;
- manufacturing variance definitions;
- standard-cost version and build architecture;
- COGS recognition and component mapping;
- inventory impairment/write-down rules;
- Finance responsibility and system ownership.

The workbook belongs to **Phase 1 — Business Architecture**:

**1. Business architecture -> 2. Stories -> 3. Operational dataset**

It defines **how HAV Seafood is designed to value inventory and account for manufacturing activity**. It does **not** contain actual inventory balances, production orders, actual costs, cost rolls, variances, COGS postings, write-downs or other historical financial activity.

---

## Core architecture principle

The central ownership boundary is:

> **Production defines physical reality. Finance defines its financial interpretation.**

Therefore:

- Production / Shared Enterprise remains authoritative for item identity;
- Production remains authoritative for recipes/BOMs, routings, process standards, work centers, capacity, staffing, yields and by-products;
- Procurement remains authoritative for suppliers, sourcing relationships and future purchasing/commercial inputs;
- Supply Chain remains authoritative for inbound logistics and receiving structures;
- HR remains authoritative for roles, positions, compensation structures and employee pay;
- Finance owns valuation classes, costing methods, cost components, standard costing rules, manufacturing accounting treatment, variance definitions, COGS treatment and inventory impairment architecture.

Finance references upstream identifiers rather than creating competing masters.

---

## Architecture scope at a glance

The workbook currently contains:

- **175 item valuation assignments**, consisting of:
  - 13 seafood raw materials;
  - 52 ingredients / processing materials;
  - 68 packaging items;
  - 18 intermediate products;
  - 24 finished-goods SKUs;
- **8 inventory valuation classes**;
- **4 costing methods**;
- **8 reusable costing profiles**;
- **14 cost components**;
- **6 purchased-cost rules**;
- **6 landed-cost types**;
- **5 landed-cost allocation rules**;
- **8 manufacturing cost profiles**;
- **42 manufacturing-profile mappings**;
- **4 BOM costing rules**;
- **33 routing costing rules**;
- **20 labor cost-rate classes**;
- **71 work-center / labor mappings**;
- **55 work-center costing-rate records**;
- **6 manufacturing overhead pools**;
- **9 overhead allocation bases**;
- **6 overhead allocation rules**;
- **25 yield costing rules**;
- **5 scrap / waste treatments**;
- **24 by-product costing rules**;
- **12 inventory posting rules**;
- **6 inventory-status accounting rules**;
- **9 manufacturing posting rules**;
- **12 manufacturing variance types**;
- **12 variance accounting rules**;
- **4 standard-cost version types**;
- **8 standard-cost build rules**;
- **6 COGS recognition rules**;
- **6 inventory impairment rules**;
- **26 cost / GL reference mappings**;
- **9 responsibility mappings**;
- **6 system / data ownership mappings**;
- **19 explicit architecture source mappings**;
- **15 relationship-catalog entries**;
- a **380-field data dictionary**.

These structures are static architecture. They are not transaction counts or historical results.

---

# Workbook structure

## `Inventory_Valuation_Classes`

Defines the eight Finance valuation classes used to interpret the existing item master:

- Seafood Raw Material;
- Ingredient;
- Processing Material;
- Primary Packaging;
- Secondary Packaging;
- Tertiary Packaging;
- Intermediate Product;
- Finished Good.

The sheet defines default valuation method, variance tracking, write-down applicability and default inventory/consumption accounting references.

Purchased stock and manufactured stock are deliberately separated.

---

## `Item_Valuation_Assignments`

Maps all **175 existing Production / enterprise items** into Finance valuation classes.

The principal relationship is:

`Production Item -> Finance Valuation Class`

The sheet does not redefine item names, technical characteristics, product composition or physical storage rules.

It is one of the main AI navigation sheets for answering questions such as:

> How does Finance classify this item for inventory valuation?

---

## `Costing_Methods`

Defines four controlled costing methods:

- `CM-STD` — Standard Cost for purchased inventory;
- `CM-MFG-STD` — Standard Manufacturing Cost;
- `CM-BYP-CREDIT` — By-product Standard Credit;
- `CM-NONSTOCK` — Non-stock Expense.

HAV Seafood therefore uses a deliberately explainable **standard-cost architecture** for purchased and manufactured inventory.

This is a synthetic internal accounting design for the course dataset and is not presented as a legal/accounting-standard requirement.

---

## `Costing_Profiles`

Combines valuation classes with costing methods and cost-component treatment.

The eight profiles cover:

- purchased seafood;
- purchased ingredients;
- purchased processing materials;
- primary packaging;
- secondary packaging;
- tertiary packaging;
- intermediate manufacturing;
- finished-goods manufacturing.

The workbook separates:

`Valuation Class -> Costing Profile -> Cost Components / Variance Treatment`

---

## `Item_Costing_Assignments`

Maps all 175 items to their Finance costing profile.

For AI workflows, this is normally the best starting point for an item-specific costing question.

The sheet links the item to the correct Finance costing structure but contains **no current monetary standard cost per item**.

---

## `Cost_Components`

Defines the financial component structure used to explain standard manufacturing cost.

Major component groups are:

### Material

- Seafood Raw Material;
- Ingredients;
- Processing Materials;
- Packaging.

### Conversion

- Direct Production Labor;
- Machine / Resource Conversion.

### Manufacturing overhead

- Production General Overhead;
- Production Utilities;
- Sanitation Support;
- Maintenance Support;
- Quality Support.

### Other manufacturing cost

- Landed Cost;
- By-product Credit;
- Normal Yield / Process Loss.

The component architecture supports later analysis of *why* a product cost changed rather than storing only one total product cost.

---

# Purchased inventory costing

## `Purchased_Cost_Rules`

Defines how purchased materials become inventory value.

The normal structure is conceptually:

`Approved Standard Purchase Cost`

`+ Directly Attributable Landed Cost`

`= Standard Inventory Acquisition Cost`

Actual supplier prices are deliberately not stored here. Future PO/invoice prices will originate from Procurement and AP operational data.

Differences between future actual purchase cost and approved standard cost can later create purchase-price variance.

---

## `Landed_Cost_Types`

Defines reusable directly attributable inbound-cost categories.

The architecture distinguishes capitalizable landed cost from period expense.

Examples include freight and other directly attributable inbound handling categories where HAV Seafood bears the cost.

---

## `Landed_Cost_Allocation_Rules`

Defines permitted allocation bases for future landed-cost distribution, such as quantity, weight, purchase value or another approved basis.

No actual freight allocation or landed-cost transaction exists in this workbook.

---

# Manufacturing cost architecture

## `Manufacturing_Cost_Profiles`

Defines eight reusable manufacturing cost structures covering:

- prepared seafood intermediates;
- formula / sauce intermediates;
- cold-smoked salmon;
- fresh salmon portions;
- pickled herring;
- frozen cod;
- canned products;
- high-care shrimp salad.

The standard cost concept is generally:

`Material`

`+ Packaging`

`+ Direct Labor`

`+ Machine / Resource Conversion`

`+ Manufacturing Overhead`

`+ Normal Yield / Process Loss`

`- Approved By-product Credit`

`= Standard Manufacturing Cost`

---

## `Manufacturing_Profile_Map`

Maps Production intermediate/finished-product structures to the appropriate Finance manufacturing cost profile.

Production remains authoritative for product and routing identity.

---

## `BOM_Costing_Rules`

Defines how Production recipes and BOM quantities should be interpreted financially.

The core principle is:

`Authoritative BOM Quantity x Approved Component Standard Cost -> Standard Material / Packaging Cost`

Finance does not copy or own the BOM itself.

---

## `Routing_Costing_Rules`

Defines the financial interpretation of Production routing activity.

Routing and work-center identity remain with Production; Finance associates routing activity with labor, resource and overhead cost drivers.

The conceptual relationship is:

`Routing Step -> Work Center -> Labor / Resource / Overhead Cost Driver`

No actual routing execution hours appear here.

---

# Labor and work-center costing

## `Labor_Cost_Rate_Classes`

Defines **20 standard labor-rate classes** linked to existing Production roles and HR pay-band architecture.

The Finance rate basis uses **HR pay-band midpoint structures rather than employee-specific wages**.

A synthetic **18% employer-burden assumption** is used for standard manufacturing costing.

Important boundary:

> The 18% burden is an internal synthetic costing assumption. It is not presented as a Faroese statutory employer-cost rate.

HR remains authoritative for compensation. Finance uses the HR architecture only as a basis for standard costing rates.

---

## `Work_Center_Labor_Map`

Maps **71 existing Production staffing requirements** to Finance standard labor classes.

The relationship is:

`Production Work Center + Role Requirement -> Finance Standard Labor Rate`

No employee-level costing is performed.

---

## `Work_Center_Cost_Rates`

Provides the static Finance costing structure for all **55 Production work centers**.

The sheet combines standard labor/resource/overhead costing drivers at work-center level.

These rates are **Phase 1 synthetic costing parameters**, not historical actual factory costs.

---

# Manufacturing overhead

## `Overhead_Pools`

Defines six standard manufacturing-overhead pools, including structures for:

- Production General;
- Maintenance Support;
- Production Utilities;
- Sanitation Support;
- Quality Support;
- other defined factory support where applicable.

Each pool is connected to an existing enterprise cost center and Finance cost component.

The standard rates are internal synthetic parameters designed to support later coherent cost generation.

---

## `Overhead_Allocation_Bases`

Defines nine permitted allocation bases, including operational drivers such as labor hours, machine hours, runtime or other production bases.

---

## `Overhead_Allocation_Rules`

Defines which overhead pool uses which allocation basis and where it may be applied.

The workbook stores the **allocation architecture**, not actual monthly overhead absorption.

---

# Yield, loss, scrap and by-products

## `Yield_Costing_Rules`

Financially interprets all **25 existing Production standard-yield records**.

Production remains authoritative for the physical yield percentage and output relationships.

Finance determines whether the physical standard represents:

- normal loss embedded in standard cost;
- recoverable output;
- a future variance basis;
- another financial treatment.

Important distinction:

`Physical Yield != Financial Variance`

Normal approved loss is embedded in standard costing. Future abnormal deviation becomes an operational/financial variance event.

---

## `Scrap_Waste_Treatment`

Defines five standard treatments for scrap, waste and abnormal loss.

The sheet distinguishes normal expected manufacturing loss from later abnormal write-off or variance treatment.

No actual scrap quantities or disposal costs are stored.

---

## `Byproduct_Costing_Rules`

Financially interprets all **24 Production by-products**.

Recoverable/saleable by-products may later receive an approved standard credit when Finance determines that the value is material and supportable.

No current monetary by-product values are seeded.

---

# Inventory accounting

## `Inventory_Posting_Rules`

Defines 12 static accounting rules for future inventory-related event types.

Examples of the architecture include future events such as:

- purchased inventory receipt;
- landed cost;
- material issue;
- inventory adjustment;
- write-off;
- finished-goods shipment / COGS-related events.

The relationship is:

`Operational Event Type -> Finance Posting Class -> Debit/Credit Treatment -> Required Dimensions`

These are rules only. No journal entries are included.

---

## `Inventory_Status_Accounting`

Defines the accounting interpretation of six controlled inventory-status categories.

A particularly important principle is:

> **Quality hold or quarantine does not automatically change inventory value.**

Financial impairment requires a separate Finance assessment supported by operational or Quality evidence.

---

# Manufacturing accounting and variances

## `Manufacturing_Posting_Rules`

Defines nine static posting treatments for future manufacturing accounting events such as consumption, labor/resource absorption, manufacturing output and production-cost effects.

Production owns the operational event. Finance owns its accounting interpretation.

---

## `Manufacturing_Variance_Types`

Defines 12 manufacturing variance concepts.

The architecture supports areas such as:

- purchase-price variance;
- material usage / consumption variance;
- material yield variance;
- labor variance;
- conversion/resource variance;
- overhead variance;
- production-volume effects;
- scrap / packaging-related variance.

No actual variance amounts are present.

---

## `Variance_Accounting_Rules`

Maps the 12 variance types to Finance accounting treatment, GL references, responsibilities and review requirements.

This provides the structural foundation for future cross-functional stories without choosing any adverse cost story during Phase 1.

---

# Standard cost architecture

## `Standard_Cost_Versions`

Defines four standard-cost version concepts used to separate approved accounting standard cost from proposed, budget or simulation structures.

The sheet defines version types only; there is no historical cost-version register.

---

## `Standard_Cost_Build_Rules`

Defines the ordered standard-cost build:

1. Seafood material;
2. Ingredients / processing materials;
3. Packaging;
4. Direct labor;
5. Machine/resource and manufacturing overhead;
6. Normal yield / loss effect;
7. Approved by-product credit;
8. Standard manufacturing cost total.

Complete item/SKU standard-cost amounts are deliberately not populated because approved supplier-price and operational cost-roll inputs do not yet exist.

This preserves the distinction:

`Costing Architecture != Approved Cost Version != Cost Roll Execution`

---

# Cost of goods sold

## `COGS_Recognition_Rules`

Defines the component-based COGS recognition structure for finished goods.

The core rule is:

`Finished Goods Inventory -> Defined Sale / Revenue Recognition Event -> COGS`

COGS is released by standard-cost component into the existing Finance Foundation Cost of Sales accounts.

This preserves the financial visibility of:

- seafood cost;
- ingredient / processing cost;
- packaging cost;
- direct labor;
- manufacturing conversion / overhead.

Revenue and COGS remain separate accounting postings even when driven by the same commercial recognition event.

---

# Inventory impairment

## `Inventory_Impairment_Rules`

Defines six structural impairment categories:

- Expired Inventory;
- Near Expiry;
- Damaged Inventory;
- Quality Rejected;
- Obsolete Packaging;
- Commercial Obsolescence.

The architecture distinguishes **operational evidence** from **Finance valuation decisions**.

Examples:

`Quality Rejection -> Quality evidence -> Finance valuation assessment -> Possible write-down/write-off`

and:

`Near Expiry -> Commercial/Quality evidence -> Finance assessment`

No impairment events or amounts are included.

---

# Accounting and governance reference layers

## `Cost_GL_Mappings`

Provides a convenience mapping between valuation/costing concepts and the existing Finance Foundation GL structure.

This sheet does not create GL accounts.

If a mapping conflicts with the authoritative Finance Accounting Foundation workbook, the Finance Foundation wins.

---

## `Responsibility_Mappings`

Maps Finance and upstream operational responsibilities to existing HR positions.

Key positions include:

- `POS-FIN-CONTROLLER` — Management Accountant / Controller;
- `POS-FIN-ACCOUNTANT` — Financial Accountant;
- `POS-FIN-MGR` — Finance & Administration Manager;
- `POS-PROD-MGR` — Production Manager;
- `POS-PROC-MGR` — Procurement Manager;
- `POS-QUAL-MGR` — Quality & Food Safety Manager;
- `POS-MNT-LEAD` — Maintenance Lead;
- `POS-LOG-SUP` — Warehouse & Logistics Supervisor;
- `POS-SAN-LEAD` — Sanitation Lead.

HR remains authoritative for position identity and incumbency.

Actual approval events are not stored here.

---

## `System_Data_Ownership`

Defines the main system boundaries:

- `ESYS-001 Core ERP` — authoritative Finance cost master / standard-cost and inventory-accounting environment;
- `ESYS-001 Core ERP` — authoritative operational record for inventory movements, production orders, outputs, consumption and purchasing inputs, owned by the relevant operating domain;
- `ESYS-005 People & Payroll` — authoritative HR/payroll source;
- `ESYS-009 Power BI` — derived management-cost reporting only.

A reporting copy never becomes authoritative merely because it contains calculated or summarized costing data.

---

## `Source_Mappings`

Documents the 19 authoritative/derived upstream sources used by the workbook.

These include:

### Finance

- Accounting Foundation & Financial Dimensions;
- Tax, Currency & Financial Documents.

### Production

- Products / SKUs;
- Raw Materials;
- Ingredients / Processing Materials;
- Packaging;
- Recipes / BOM;
- Routings;
- Process Steps;
- Standard Yields & By-products;
- Production Lines & Work Centers;
- Capacity & Staffing;
- Machinery / Equipment;
- Storage Locations;
- Production Reference Tables.

### Procurement / Supply Chain

- Supplier Sourcing Architecture;
- Inbound Logistics & Receiving.

### HR

- Compensation Structure;
- Positions & Workforce Establishment.

Where the Finance workbook references an upstream fact, the authoritative upstream source wins if a conflict occurs.

---

## `Relationship_Catalog`

Provides a compact AI-friendly map of the central joins, including:

`Production Item -> Finance Valuation Assignment`

`Valuation Class -> Costing Profile`

`Production BOM -> BOM Costing Rule`

`Production Routing -> Routing Costing Rule`

`Production Staffing Requirement -> Work-Center Labor Map`

`HR Pay Band -> Finance Standard Labor Rate`

`Work Center -> Standard Work-Center Cost Rates`

`Production Yield -> Finance Yield Interpretation`

`Production By-product -> Finance By-product Treatment`

`Inventory Event -> Inventory Posting Rule`

`Manufacturing Event -> Manufacturing Posting Rule`

`Variance Type -> Variance Accounting Rule`

`Finished-Goods Standard Cost -> COGS Recognition`

`Operational Evidence -> Inventory Impairment Assessment`

---

## `Architecture_Notes`

Records the workbook's important design assumptions and explicit boundaries.

Key decisions include:

- standard-cost architecture is synthetic and designed for the HAV Seafood dataset;
- purchased inventory uses approved standard cost with future purchase differences handled separately;
- manufactured inventory uses standard manufacturing cost;
- labor rates are based on HR pay-band midpoint architecture rather than employee-specific pay;
- employer burden, machine/resource rates and overhead rates are synthetic Finance assumptions;
- no complete standard-cost amount is currently assigned by item/SKU;
- normal loss is embedded through Production standard yields;
- by-products do not currently carry seeded monetary values;
- Quality hold does not automatically mean impairment;
- COGS is component-based;
- Core ERP remains the authoritative Finance costing/accounting system;
- no deliberate Phase 2 story anomaly is embedded.

---

## `Control_Parameters`

Contains architecture QA targets including:

- 175 expected item valuation assignments;
- 24 expected finished goods;
- 55 expected work centers;
- 25 expected yield standards;
- 24 expected by-products;
- 71 expected staffing requirements;
- formula/error integrity control.

These are workbook controls, not operational KPIs.

---

## `Data_Dictionary`

Contains **380 field definitions** covering the complete workbook.

This is intended to support AI interpretation, later dataset generation and cross-domain joins.

---

# How the architecture fits together

At a high level:

`Production / Enterprise Item`

`-> Finance Valuation Class`

`-> Costing Profile`

Then purchased materials follow:

`Supplier / Purchase Cost`

`+ Landed Cost`

`-> Purchased Inventory Standard Cost`

Manufactured products follow:

`BOM / Recipe`

`+ Routing / Work Center`

`+ Standard Labor / Resource Rates`

`+ Manufacturing Overhead`

`+ Yield / Normal Loss`

`- Approved By-product Credit`

`-> Standard Manufacturing Cost`

Operational manufacturing/accounting then follows conceptually:

`Inventory / Production Event`

`-> Posting Rule`

`-> Inventory / Manufacturing Accounting`

`-> Variance where actual differs from standard`

and finished goods ultimately follow:

`Finished Goods Inventory`

`-> Sale / Recognition Trigger`

`-> Component-based COGS`

---

# Important conceptual boundaries

The architecture deliberately preserves the following distinctions:

`Item Identity != Finance Valuation Class`

`Physical BOM != Financial BOM Cost`

`Production Routing != Routing Cost`

`Employee Pay != Standard Labor Cost Rate`

`Work Center Capacity != Work Center Cost Rate`

`Physical Yield != Financial Variance`

`Normal Loss != Abnormal Variance`

`By-product Definition != By-product Monetary Value`

`Quality Hold != Financial Impairment`

`Inventory Status != Inventory Write-down`

`Costing Method != Cost Version`

`Cost Version != Cost Roll Execution`

`Standard Cost != Actual Cost`

`Variance Definition != Variance Event`

`Posting Rule != Journal Entry`

`Finished Goods Inventory != COGS`

`Revenue Recognition != COGS Posting`

These boundaries should also be preserved when Phase 3 operational data is generated.

---

# Architecture boundaries — operational data intentionally excluded

This workbook does **not** contain:

- inventory balances;
- inventory values by date;
- purchase orders;
- actual supplier prices;
- goods receipts;
- supplier invoices;
- actual landed costs;
- inventory movements;
- material issues;
- material returns;
- production orders;
- production batches;
- actual BOM consumption;
- actual labor hours;
- employee time registrations;
- actual machine hours;
- production output quantities;
- actual yields;
- actual scrap;
- waste events;
- actual by-product production;
- monetary by-product values;
- completed standard-cost rolls;
- historical standard costs;
- actual manufacturing costs;
- actual purchase-price variances;
- actual material variances;
- actual labor variances;
- actual overhead variances;
- COGS transactions;
- margin history;
- inventory impairment cases;
- write-down amounts;
- inventory write-offs;
- journal entries;
- period-end overhead absorption;
- cost-accounting close history;
- approval events;
- cost-version approval history.

Those belong to Phase 3 after business stories have been deliberately selected in Phase 2.

---

# Story neutrality

The workbook is designed to support later stories without selecting them yet.

It does not deliberately seed:

- seafood purchase-price inflation;
- adverse material usage;
- poor yield;
- abnormal scrap;
- excessive packaging consumption;
- inefficient labor usage;
- production-volume under-absorption;
- excessive maintenance or utility overhead;
- cost-roll errors;
- incorrect inventory valuation;
- unexplained manufacturing variance;
- obsolete inventory;
- large write-downs;
- margin deterioration;
- accounting-control failures.

Such patterns should be introduced only in **Phase 2 — Stories** and subsequently expressed through Phase 3 operational data.

---

# Recommended AI use

For fast navigation:

- **How is an item valued?** -> `Item_Valuation_Assignments`
- **Which costing method/profile applies?** -> `Item_Costing_Assignments` + `Costing_Profiles`
- **What components make up manufacturing cost?** -> `Cost_Components`
- **How is purchased inventory costed?** -> `Purchased_Cost_Rules`
- **How are freight/landed costs treated?** -> `Landed_Cost_Types` + `Landed_Cost_Allocation_Rules`
- **How is a product family costed?** -> `Manufacturing_Cost_Profiles` + `Manufacturing_Profile_Map`
- **How does the BOM affect cost?** -> `BOM_Costing_Rules`, then inspect the authoritative Production BOM
- **How does the routing affect cost?** -> `Routing_Costing_Rules`, then inspect the authoritative Production routing
- **What standard labor basis applies?** -> `Labor_Cost_Rate_Classes` + `Work_Center_Labor_Map`
- **What are the work-center rates?** -> `Work_Center_Cost_Rates`
- **How is overhead absorbed?** -> `Overhead_Pools` + `Overhead_Allocation_Rules`
- **How is normal yield/loss treated?** -> `Yield_Costing_Rules`
- **How are scrap/waste treated?** -> `Scrap_Waste_Treatment`
- **How are by-products treated?** -> `Byproduct_Costing_Rules`
- **How would an inventory event post?** -> `Inventory_Posting_Rules`
- **How would a manufacturing event post?** -> `Manufacturing_Posting_Rules`
- **Which variance type applies?** -> `Manufacturing_Variance_Types` + `Variance_Accounting_Rules`
- **How is standard cost built?** -> `Standard_Cost_Build_Rules`
- **How is COGS recognized?** -> `COGS_Recognition_Rules`
- **When can inventory be impaired?** -> `Inventory_Impairment_Rules`
- **Who owns/reviews the structure?** -> `Responsibility_Mappings`
- **Which system/domain is authoritative?** -> `System_Data_Ownership` + `Source_Mappings`
- **How do the entities join?** -> `Relationship_Catalog`

The authoritative upstream workbook should always be consulted when the question concerns a physical/product/people/supplier fact rather than its Finance interpretation.

---

# Use in later phases

## Phase 2 — Stories

This architecture provides the stable structures needed to design cross-functional stories involving areas such as:

- seafood/raw-material price movement;
- landed-cost changes;
- standard-cost updates;
- supplier price versus standard cost;
- material usage variance;
- yield deterioration;
- abnormal scrap;
- packaging usage;
- labor efficiency;
- overhead absorption;
- production-volume effects;
- by-product recovery;
- COGS and margin changes;
- inventory impairment;
- obsolete packaging;
- quality-related write-downs;
- valuation/control failures.

Stories should reference the existing item, BOM, routing, work-center, yield, costing, GL and responsibility structures rather than modifying architecture merely to make a pattern possible.

## Phase 3 — Operational dataset generation

Operational costing/accounting datasets should:

1. reuse the item, SKU, supplier, BOM, routing, work-center, cost-center, GL, position and system identifiers already defined;
2. preserve Production ownership of physical manufacturing data;
3. preserve Procurement ownership of supplier/purchase inputs;
4. preserve HR ownership of people and compensation data;
5. use the costing methods, profiles, cost components, rates and posting rules defined here;
6. generate actual cost and variance events only from later operational activity;
7. distinguish standard cost from actual cost;
8. preserve component-level cost and COGS visibility;
9. require separate evidence and Finance assessment before impairment/write-down;
10. generate ordinary activity and noise around deliberately selected Phase 2 stories;
11. avoid redefining master data inside operational files.

Potential Phase 3 formats may include ERP inventory exports, production-cost reports, cost-roll files, variance reports, inventory valuation reports, manufacturing journals, spreadsheet cost analyses, management reports and supporting communications while remaining anchored to this architecture.

---

# Overall role of this architecture

Together, the workbook forms the **static financial valuation and manufacturing-costing layer** for HAV Seafood.

It connects the existing physical business architecture — items, purchased materials, packaging, BOMs, routings, work centers, staffing, yields, by-products and supplier structures — to Finance valuation classes, cost components, standard costing, overhead, accounting rules, variances, COGS and impairment treatment.

Its main purpose is to ensure that later synthetic inventory and manufacturing accounting behaves like one coherent financial system while preserving clear ownership between Production, Procurement, Supply Chain, HR and Finance.
