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S
Steve Rutt
January 30, 2019
Question

Inventory Assembly

  • January 30, 2019
  • 2 replies
  • 0 views

Hello, 

 

We manufacture beer so we build all of our Assemblies using Parts. If we have a price in the Cost field in addition to the bill of materials will this be added to our COGS? I just noticed we have prices in the cost field and am afraid our COGS are being Overstated.

 

Thanks,

 

2 replies

C
Charies_M
Level 9
January 30, 2019

Hi there, Steve Rutt.

 

Welcome to the Intuit Community. Allow me to bring clarifications to your concern about Inventory Assembly in QuickBooks Desktop.

 

For the items that you build, the Avg. Cost will be the total of the costs of all the items in the Bill of Materials. However, you're still responsible for filling in the Cost amount yourself. The initial Avg. Cost of the inventory assembly is calculated by dividing the Total Value with the Initial On Hand quantity.

 

You can either select the Use global preference which is your setup in the Items & Inventory preferences, the User defined cost which is use if you want to set the cost yourself, or the Use Total BOM Cost if you want to use the total cost of the components in the Bill of Materials as the total cost of the assembly.

 

In addition, QuickBooks uses the weighted average cost to determine the value of your inventory and the amount debited to COGS when you sell inventory. The average cost is the sum of the cost of all of the items in inventory divided by the number of items.

 

To learn more about Inventory Assembly Items in QuickBooks, you can check out this article: Create, build, and work with inventory assembly items.

 

Should you have further questions about building assemblies in QuickBooks, just let me know. I'm always here to help.

C
cgaslin
November 12, 2019

I am using Quickbooks Desktop Premier Manufacturing and Wholesale 2017. I do not see in the Items & Inventory Preferences the option to select either the global or the BOM cost.  Am I not looking at the correct area. 

C
Catherine_B
Level 9
November 12, 2019

Hi there, cgaslin.

 

My colleague was referring to the Item window where you assemble your parts, instead of the Items & Inventory Company Preferences option.

 

To see that option, here’s how:

  1. From the Lists menu, click Item Lists.
  2. Double-click on the Assembly you created.
  3. Under the Costs field, there’s a drop-down to select Use global preference, User defined cost, or Use Total BOM Cost.
  4. Click OK.

In addition, these options are only available in QuickBooks Desktop Enterprise version. 

 

You can check this article to learn more on how to combine your inventory items to build finished goods. 

 

Reach out to me if you need more help!

S
ScriptDawg
May 8, 2020

Hi there,   

I know I’m late to the party, but have you tried checking out the QuickBooks Appstore for a solution?   

The apps there have been built to be integrated with QBO, but some can be used independently or side by side with QBD.   

Katana Smart Manufacturing Software is an app that supports manufacturing businesses, such as brewers with:   

  • Raw material management;   
  • Automatic item allocation to sales and manufacturing orders;   
  • Priority-based production planning; and   
  • Automatic manufacturing cost calculations.   
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