Selling price of produced products

Hi there, @SB1368.

It's integral to understand the Cost of Goods Sold (COGS) when running a business that has inventory. Knowing the COGS can help you calculate your business profits and inform a price point for an item or service.

The cost of goods sold may include

• Materials used to create a product or perform a service
• Labor needed to make a product or perform a service
• Overhead costs directly related to production (for example, the cost of electricity to run an assembly line)

The cost of goods sold excludes

• Indirect expenses (for example, distribution or marketing)
• Overhead costs associated with general business operations
• The cost of creating unsold inventory or services

You can create a special inventory item called Inventory Assembly. As part of the inventory assembly item, you specify a bill of materials (BOM) showing the exact items. These include labor and quantities that go into the manufactured product. The BOM will provide a total cost for manufacturing the product.

I'm also linking the following articles that provide more information about COGS and the available inventory reports:

• Understand inventory assets and cost of goods sold tracking
• Use reports to see your sales and inventory status

You can always reply in this thread should you need more help running inventory reports. I'm always here to assist.

Hi there  @LieraMarie_A 

Thanks for your help.

i mean we buy wheat from our vendors. after that we produce wheat flour and bran. i know all the amount of expenses.

as i mentioned we buy wheat 1 (MT) for 410$. when we produced bran, we sell it for 200$. so we have 210$ loss on our bran. Also we know about the amount of expenses for labor, electricity bills, transportation, marketing and so on. In general  we should collect all the expenses and loses that make the price of wheat flour higher.

For Example:

From 100 (MT) Wheat we can produce 83 (MT) wheat flour . so we have 17 (MT) loss that include all the expenses that i mentioned like marketing, electricity and also wastage.

before selling our product (Wheat Flour), we want to know how much we  expended  and how much we should sell it.

Thanks for getting back to us promptly, @SB1368.

You can set up an inventory assembly. This allows you to specify a bill of materials (BOM) showing the exact items. These include labor and quantities that go into the manufactured product. The BOM will provide a total cost for manufacturing the product.

1. From the Lists menu, select Item List.
2. Select the Item ▼ drop-down and then New. Then, select Inventory Assembly.
3. Add your product’s name or build number.
4. Add the Cost. This can be the total cost of all the parts in the bill of materials. Or it can include other expenses.
5. From the COGS Account drop-down, select Cost of Goods Sold. QuickBooks uses this account to track the cost of products you sell.
6. You can also add a description of this product.
7. Add the Sales Price. Then, select the Income Account ▼ drop-down and find the account you use to track sales from finished goods.
8. If you need a new account, scroll to the top of the drop-down list and select.
9. Under Bill of Materials, select the items you use to manufacture. You can change the quantity and unit of measure of each item.
10. Select OK.

Once you set up your product’s bill of materials, you can start building. 

Please let me know should you have further questions about setting up an inventory. I'm always here to help.