This activity is used to calculate and cascade weighted average actual cost for a shop order that is not closed.
When a shop order is closed for a manufactured part that has an inventory valuation method set to standard cost and the inventory part cost level set to cost per serial, or the inventory valuation method set to weighted average with any inventory part cost level, then the total work in progress on that shop order will be used to calculate the cost that will be used to update the shop order receipt/scrap transaction(s) for the part. The change of the weighted average cost will also be cascaded to transactions made after that shop order receipt.
Shop order part (Manufactured) should have the inventory valuation method set to standard cost and the inventory part cost level set to cost per serial, or the inventory valuation method set to weighted average and the inventory part cost level set to any inventory part cost level.
The total work in progress, up to the point where this activity is used on a particular shop order will be used to calculate the cost that will be used in order to update the shop order receipt/scrap transaction(s).