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Senior Contributor *

Inventory part and non-inventory part in one product?

I have a company that produces packaged ice.  The components are water, bag & bag-tie per product sold.

We buy bags by the 100,000 that cost a fraction of a cent each.  Bag ties come in 100 ft reels.

Water is bought by units of 1000s of gallons with a quarterly billing.  We produce 7 lb., 40 lb. bagged ice and 12 lb. block ice.

How should the items list be set up?

We could have these all go as COGS but would like to be able to determine the cost of production of each product.  

We also purchase 20 lb. from a vendor for resale. How would this item be set up as well?

The Community's help is always appreciated.  Thank you all.

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Best answer a month ago

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Established Community Backer ***

Re: Inventory part and non-inventory part in one product?

@Susan607 

 

 

Sorry for the delay, I've been out of town and I disconnect when that happens.

QB keeps cost of inventory out to 5 decimal places. Stock the water as 1 = 1 gal as I said. When you enter the purchase select the item , enter the qty of 100K and the total price, when you click out of the total price block QB do the math for the per item rate.

 

The cost block on the item screen is just a reference, QB uses the average cost based upon purchases in normal operations.

 

what you sell to the customer for has nothing to do with how you stock the item, or its cost.

 

I do not have mac, but in windows QB under the lists menu is a price level list which does allow you to set custom sales prices per list and you can assign that list to one or more customers.  Check all the menus in mac, it might be there somewhere

 

Or you might, down the road, consider running winQB under parallels or another windows emulator

 

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Established Community Backer ***

Re: Inventory part and non-inventory part in one product?

I'm pretty sure that you have already tallied the CoG for each size ice bag since its just adding 3 items - you dont need any fancy QB assembly for that. So one option for your 7, 12 & 40 lb bags would be to simply treat them as non-inventory items.

But if you have a big stock of ice on hand and want to track your inventory in QB then you would need to treat then as inventory items, and in this case probably as assembly items consisting of water, bag & tie. Those components will probably be classed as non-inventory items and manually put the expected unit cost in the item setting. For clarity I suggest you covert the price of water to per lb so there would be 40 waters going into the 40 lb ice item (plus one bag and one tie).

The water, bag and tie stock is 'production supplies' which is a separate asset from inventory. Handle this as manually tallied periodic inventory.  So I would set the 'expense category' for those items to that gl.  In your case the 'water' stock may be negative if you use it before buying it. If so you might want to change the accounting for that item so it shows on the liability side of your balance sheet.

The 20lb bag is a standard inventory item that you simply buy and sell.

Senior Contributor *

Re: Inventory part and non-inventory part in one product?

I'm sorry but I don't understand anything you said.  This is more confusing than I thought it would be.

"you have already tallied the CoG for each size ice bag since its just adding 3 items"  ???

 

"components will probably be classed as non-inventory items and manually put the expected unit cost in the item setting."    I'm trying to determine the cost of the item.

 

" you covert the price of water to per lb so there would be 40 waters going into the 40 lb ice item (plus one bag and one tie)."   what is water to per lb?  A 7 lb bag uses .84 gallons of water.  The cost of that amount of water would be a fraction of a cent.

 

"The water, bag and tie stock is 'production supplies' which is a separate asset from inventory."   Are you saying the finished product, the bagged ice, is the separate asset or each of those items is a separate asset or neither?

Established Community Backer ***

Re: Inventory part and non-inventory part in one product?

@Susan607 

 

stock the bag tie as an inventory item, qty of one = one reel. When a reel is empty use inventory adjust, set the adjusting account to COGS and lower the qty on hand. Or you can use the adjustment when you start to use the reel - which is the way I would do it, that way inventory always shows full reels. It is just not practical, IMO, to count an inch or two of wire tie per bag

 

stock the bags as inventory items, yes the cost will a fraction of a cent, inventory qty of one = one bag

 

stock water you purchase as inventory, qty of one = one gal

 

set up a group item per bag size, in the group item list a bag qty one, and the water item qty = however many gallons it takes for that amount of ice. sell the group item

Periodically you will need to "count" water on hand and do an adjustment, adjust to COGS. There is going to be spillage and evaporation, and since you use .84 gallons for the seven pound bag, there will be some odd decimal number that needs to be cleared to COGS with an adjustment every so often

Senior Contributor *

Re: Inventory part and non-inventory part in one product?

Hello, Mike,

I'm using QB Desktop for Mac.  No assemblies in that program.  

A gallon is costing  .008 dollars a gallon (8/10ths of 1 cent).  Our 7# bags are using  .84 gallons.

How do I set up the water which is paid for by the 100,000 of gallons,  the bags that are purchased by the 250,000 per order?

I figure as components:  7# water + 7# bag + bag tie  = (1) 7 lb bag;

12# water + 12# bag + bag tie = 12 lb block;  

40# water + 40# bag + hog tie = 40 lb bag

I'm unclear as to how to put in the cost of the components and then what their sale price would be, especially at these quantities and that the components are not sold individually.

The prices for each of the products sold vary from one customer to another depending on the resell arrangements.  Thank you for your help.

Senior Contributor *

Re: Inventory part and non-inventory part in one product?

Hello, Rustler,

 

Thanks for the insight.  So I take it, each product - 7# bag, 40# bag & 12# block, will then be seen as being composed of 2 components - bag & water with the bag ties & hog ties just expensed as they are used up, correct?

 

What am I putting in for cost & sales price for each gallon of water?  We pay for a couple of 100,000 gallons of water at a time with .84 gallon used for a 7# bag but the cost of a gallon of water is .008 dollars (8/10th of a cent).  We sell our products at various prices to various resellers depending on our arrangements.  (Would be nice if QB had varied pricing levels for products that we could associate with classes of customer types.).

I don't know how to fill in that new item form.   Thanks for your patience. -Susan

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Established Community Backer ***

Re: Inventory part and non-inventory part in one product?

@Susan607 

 

 

Sorry for the delay, I've been out of town and I disconnect when that happens.

QB keeps cost of inventory out to 5 decimal places. Stock the water as 1 = 1 gal as I said. When you enter the purchase select the item , enter the qty of 100K and the total price, when you click out of the total price block QB do the math for the per item rate.

 

The cost block on the item screen is just a reference, QB uses the average cost based upon purchases in normal operations.

 

what you sell to the customer for has nothing to do with how you stock the item, or its cost.

 

I do not have mac, but in windows QB under the lists menu is a price level list which does allow you to set custom sales prices per list and you can assign that list to one or more customers.  Check all the menus in mac, it might be there somewhere

 

Or you might, down the road, consider running winQB under parallels or another windows emulator

 

Senior Contributor *

Re: Inventory part and non-inventory part in one product?

Hello, Rustler,

Thank you for being so attentive.  I think I have all the inventory and grouping of items worked out.

I'm doing mini-P&L statements to see how the COGS and the sales look to see if the costs of the components of the group and the sales make sense.

As far as I can tell, no place for price levels in Desktop for Mac. See image uploaded.

Actually, I used to use PCs before the updates and security patches became such a constant issue.

I have used Parallels but the work my processor had to do was heating up my laptop so much it worried me.  I even had a fan base for it but it was still too hot.

The load and access times with the Mac are so much faster as well, so I've gotten pretty used to it.

The cross device availability of it is nice as well with iCloud.  

I'm hoping QB can bring a more robust and comprehensive version to the Mac.   Many of my small business owners, < 10 employees, all use Macs.  Thanks for getting back to me.  You're a gem. -Susan

 

 

QuickBooks Team

Re: Inventory part and non-inventory part in one product?

Hello there, @Susan607.

 

I understand how your suggestion and idea for QuickBooks functionality would be useful in the system. Please know that I’m taking note of your feedback and passing it along here on my end. I'll surely forward this request to our product engineers, so that this may be considered for future upgrades.

 

For now, you can visit our QBO Blog for additional reference while working with QuickBooks, and register to our Newsletter to receive email updates about what new changes are being rolled out.

 

If you have any follow up questions, please let me know by commenting below. I'd be happy to answer any questions you may have. Have a great day!