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Steve Rutt
Level 1

Inventory Assembly



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.




6 Comments 6

Inventory Assembly

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.

Level 1

Inventory Assembly

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. 

QuickBooks Team

Inventory Assembly

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!

Level 4

Inventory Assembly

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.   
Level 1

Inventory Assembly

I tried to change my cost preference as described from global to another option but this field is shaded out for me. Is that normal?

QuickBooks Team

Inventory Assembly

Thanks for joining the thread, @AVelectric. I’ll chime in and provide some insight into your concern about an option in QuickBooks Desktop. 


As provided by my colleague above, this option is exclusive in QBDT Enterprise version. This could be the possible reason why it’s greyed out on your end. 


To learn more about managing/tracking inventory in (QBDT), please refer to this article: Understand inventory assets and cost of goods sold tracking.


For the detailed steps on how to fix this issue, consider checking out this article: Fix negative inventory issues in QuickBooks Desktop (QBDT). It also contains the ways on how to prevent this in the future.


Please let me know if you have any questions about inventory in QDT. I'll be right here to help. Wishing you the best.

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