diff --git a/erpnext/manufacturing/doctype/work_order/test_work_order.py b/erpnext/manufacturing/doctype/work_order/test_work_order.py
index 68de0b2..bf1ccb7 100644
--- a/erpnext/manufacturing/doctype/work_order/test_work_order.py
+++ b/erpnext/manufacturing/doctype/work_order/test_work_order.py
@@ -513,6 +513,60 @@
 		work_order1.save()
 		self.assertEqual(work_order1.operations[0].time_in_mins, 40.0)
 
+	def test_batch_size_for_fg_item(self):
+		fg_item = "Test Batch Size Item For BOM 3"
+		rm1 = "Test Batch Size Item RM 1 For BOM 3"
+
+		frappe.db.set_value('Manufacturing Settings', None, 'make_serial_no_batch_from_work_order', 0)
+		for item in ["Test Batch Size Item For BOM 3", "Test Batch Size Item RM 1 For BOM 3"]:
+			item_args = {
+				"include_item_in_manufacturing": 1,
+				"is_stock_item": 1
+			}
+
+			if item == fg_item:
+				item_args['has_batch_no'] = 1
+				item_args['create_new_batch'] = 1
+				item_args['batch_number_series'] = 'TBSI3.#####'
+
+			make_item(item, item_args)
+
+		bom_name = frappe.db.get_value("BOM",
+			{"item": fg_item, "is_active": 1, "with_operations": 1}, "name")
+
+		if not bom_name:
+			bom = make_bom(item=fg_item, rate=1000, raw_materials = [rm1], do_not_save=True)
+			bom.save()
+			bom.submit()
+			bom_name = bom.name
+
+		work_order = make_wo_order_test_record(item=fg_item, skip_transfer=True, planned_start_date=now(), qty=1)
+		ste1 = frappe.get_doc(make_stock_entry(work_order.name, "Manufacture", 1))
+		for row in ste1.get('items'):
+			if row.is_finished_item:
+				self.assertEqual(row.item_code, fg_item)
+
+		work_order = make_wo_order_test_record(item=fg_item, skip_transfer=True, planned_start_date=now(), qty=1)
+		frappe.db.set_value('Manufacturing Settings', None, 'make_serial_no_batch_from_work_order', 1)
+		ste1 = frappe.get_doc(make_stock_entry(work_order.name, "Manufacture", 1))
+		for row in ste1.get('items'):
+			if row.is_finished_item:
+				self.assertEqual(row.item_code, fg_item)
+
+		work_order = make_wo_order_test_record(item=fg_item, skip_transfer=True, planned_start_date=now(),
+			qty=30, do_not_save = True)
+		work_order.batch_size = 10
+		work_order.insert()
+		work_order.submit()
+		self.assertEqual(work_order.has_batch_no, 1)
+		ste1 = frappe.get_doc(make_stock_entry(work_order.name, "Manufacture", 30))
+		for row in ste1.get('items'):
+			if row.is_finished_item:
+				self.assertEqual(row.item_code, fg_item)
+				self.assertEqual(row.qty, 10)
+
+		frappe.db.set_value('Manufacturing Settings', None, 'make_serial_no_batch_from_work_order', 0)
+
 	def test_partial_material_consumption(self):
 		frappe.db.set_value("Manufacturing Settings", None, "material_consumption", 1)
 		wo_order = make_wo_order_test_record(planned_start_date=now(), qty=4)
diff --git a/erpnext/stock/doctype/stock_entry/stock_entry.py b/erpnext/stock/doctype/stock_entry/stock_entry.py
index 90b81dd..c9838d7 100644
--- a/erpnext/stock/doctype/stock_entry/stock_entry.py
+++ b/erpnext/stock/doctype/stock_entry/stock_entry.py
@@ -1090,13 +1090,13 @@
 			"is_finished_item": 1
 		}
 
-		if self.work_order and self.pro_doc.has_batch_no:
+		if self.work_order and self.pro_doc.has_batch_no and cint(frappe.db.get_single_value('Manufacturing Settings',
+			'make_serial_no_batch_from_work_order', cache=True)):
 			self.set_batchwise_finished_goods(args, item)
 		else:
-			self.add_finisged_goods(args, item)
+			self.add_finished_goods(args, item)
 
 	def set_batchwise_finished_goods(self, args, item):
-		qty = flt(self.fg_completed_qty)
 		filters = {
 			"reference_name": self.pro_doc.name,
 			"reference_doctype": self.pro_doc.doctype,
@@ -1105,7 +1105,17 @@
 
 		fields = ["qty_to_produce as qty", "produced_qty", "name"]
 
-		for row in frappe.get_all("Batch", filters = filters, fields = fields, order_by="creation asc"):
+		data = frappe.get_all("Batch", filters = filters, fields = fields, order_by="creation asc")
+
+		if not data:
+			self.add_finished_goods(args, item)
+		else:
+			self.add_batchwise_finished_good(data, args, item)
+
+	def add_batchwise_finished_good(self, data, args, item):
+		qty = flt(self.fg_completed_qty)
+
+		for row in data:
 			batch_qty = flt(row.qty) - flt(row.produced_qty)
 			if not batch_qty:
 				continue
@@ -1121,9 +1131,9 @@
 			args["qty"] = fg_qty
 			args["batch_no"] = row.name
 
-			self.add_finisged_goods(args, item)
+			self.add_finished_goods(args, item)
 
-	def add_finisged_goods(self, args, item):
+	def add_finished_goods(self, args, item):
 		self.add_to_stock_entry_detail({
 			item.name: args
 		}, bom_no = self.bom_no)