Cost of Goods Sold

That's what I thought. But it doesn't work like this at all time. For example, we purchased 2 of an item at $120/ea (as a prototype). 4 months later we ordered and received 400 of the same item at $55/each. But the Avg Cost still shows at $120! Not right.

Thank you.

Hello. I have a question regarding entering item parts. Do I create a new inventory part for every new cost of the same item? I am just setting up a new business and we have items that we purchased at different costs,

Good day, @BlissinCT.

Thank you for choosing QuickBooks as your accounting partner. I'd be pleased to introduce to you our Advanced Pricing feature.

The Price Rules is available in the Enterprise versions. QuickBooks automatically changes the prices of items on sales forms according to rules you set for a customer, item, sales rep, date range, and class.

Here's how to turn it on: 

1. Click Edit.
2. Choose Preferences.
3. Go to the Sales & Customers menu.
4. Choose the Company Preferences tab.
5. In the Custom Pricing section, select Enable Advanced Pricing.
6. Select OK.

Here's how to create a price rule:

1. Click Lists.
2. Choose Price Rule List.
3. Right-click on your mouse and choose New.
4. Enter the necessary information.
5. Click OK.

For in-depth information, please check the Advanced Pricing article.

That's it. Let me know if you have other questions for me. I'm willing to help you more about inventory. Wishing you all the best!

I'm really just learning about accounting and need to know that if I buy 5 of item A at $10 one day and then 20 of item A at $20 the next month, how do I account for that in my inventory parts list. 

Hi there, BlissinCT.

The average cost is automatically updated in QuickBooks. When you create a bill, use the same inventory item and update the cost. This will prompt you to update the item record with the new cost.

When you run the Inventory Valuation Summary, you'll be able to see the adjusted average cost.

Feel free to reach out to us if you have any other questions about QuickBooks. Thanks.

the COGS are calculating correctly based on what was on the issued PO.

the problem is that the average cost does not account to other items i supply to the manufacture.

i supply labels, install sheets, these items have an inventory number, the average cost in QB does not account for these items.  Is there a way to properly account for all the charges associated with the final item cogs.

example:

part # ABC cost $10.00 from manufacture

ABC components: part # B100 - label cost $0.50 each

                                   part# C100 - install sheet $0.25 each

True COGS of ABC $10.75, QB is recording COGS is $10.00 as this is what is on the PO.

We invoice our customers for part number ABC @ 15.00.

QB is reporting that profit is $5.00 when actual profitability is $4.25.

Any help would be greatly appreciated

I am trying to add material cost to an invoice in MAC QB desktop 2020 but the drop down only lets me charge for  labor.  What am I doing wrong?  In the old version of QB I was able to choose from the drop down and add material as I purchased it..

Hi there, @marykay60.

When you create inventory items and choose Inventory part as the type for the reason that you're going to resell these items. QuickBooks will automatically create a Cost of Goods Sold account to track the cost for the items you are selling. Cost of Goods Sold (COGs) is one of the default accounts used by QuickBooks this will be automatically generated in a transaction when using an inventory item. 

For more understanding about the inventory assets and cost of goods sold tracking in QuickBooks, you may refer to this article link: Track inventory. 

Don't hesitate to post a reply below if you have further QuickBooks concerns. I'm always here to help you. Stay safe and take care always. 

so you're saying cost of goods can't be an option in the drop down menu of an invoice..seem's ridiculous you have to create an inventory item in order to bill someone for something you picked up and just want to show it as material without inventorying the items..so, can you explain the process of creating an inventory item and being able to bring it into an invoice..

Hello, @marykay60.

Costs of Goods Sold (COGS) is one of the default accounts used by QuickBooks. This will be automatically generated in a transaction when using an inventory item. You'd want to make sure to add the purchase details of the inventory item used in the invoice. This way, you can add its add material cost.

Here's how to create inventory items:

Step 1: Turn on the inventory functionality

1. Go to the Edit menu, then choose Preferences.
2. Select Company Preferences.
3. Put a check-mark beside Inventory and purchase orders are active.
4. Click OK.

Step 2: Add inventory tracking accounts to the Chart of Accounts

1. Go to the Lists menu, then select Chart of Accounts.
2. Select the Account drop-down arrow at the bottom, then click New.
3. Click the Income radio button, then hit Continue.
4. Enter the information needed.
5. Click Save & Close.

Step 3: Setup inventory items

1. Go to the Lists menu, then select Item List.
2. Click the Item drop-down arrow at the bottom, the choose New.
3. Select the Type drop-down arrow, then choose Inventory.
4. Enter the information needed.
5. Once done, click OK.

You can read through this article for more detailed insights: Understand inventory assets and costs of goods sold tracking.

Stay in touch if you have additional questions about tracking inventory in QuickBooks. I'm always around to answer them. Have a good one.