Comments on: Understanding QuickBooks Total Bill of Materials Cost http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/ The Authoritative Source for Small Business Accounting Solutions Wed, 16 May 2012 22:51:51 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Charlie Russell http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/comment-page-1/#comment-114366 Charlie Russell Fri, 13 Apr 2012 16:14:58 +0000 http://www.sleeter.com/blog/?p=151#comment-114366 Hale, that all depends on how you want to manage things. Materials can be non-inventory parts, inventory parts or assemblies, depending on how you want to manage things. In a typical construction environment I wouldn't expect that you would use an assembly part. However, there are situations where you might. Also, you can use an assembly item just like an inventory part if you wish. Hale, that all depends on how you want to manage things. Materials can be non-inventory parts, inventory parts or assemblies, depending on how you want to manage things.

In a typical construction environment I wouldn’t expect that you would use an assembly part. However, there are situations where you might. Also, you can use an assembly item just like an inventory part if you wish.

]]> By: Hale http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/comment-page-1/#comment-114346 Hale Fri, 13 Apr 2012 14:48:39 +0000 http://www.sleeter.com/blog/?p=151#comment-114346 Charlie: 1. In QB for contractors,what is the type of all the direct materials used in construction (Inventory Part or Assembly)? 2. How can you monitor these direct materials (units on hand)? thanks! Charlie:
1. In QB for contractors,what is the type of all the direct materials used in construction (Inventory Part or Assembly)?
2. How can you monitor these direct materials (units on hand)?
thanks!

]]> By: Charlie Russell http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/comment-page-1/#comment-100799 Charlie Russell Fri, 03 Feb 2012 22:42:46 +0000 http://www.sleeter.com/blog/?p=151#comment-100799 Ryan, I'm not sure that I would want to have my price markup based on average cost instead of the last cost purchased. Personally, marking up on my most current cost makes more sense. However, everyone has their own way to deal with this issue. Depending on what QB product and year of product you have, there are different solutions. Enterprise 12 has an automatice price update feature (make sure you have the most current release, as older releases have bugs!) that is the only way to automatically update when a cost changes that I am aware of - but it works on "cost" not average cost. I have a utility that will do updates of price based on the average cost, in addition to "cost", but you have to manually run this when you want to update things. It works for some business situations, but not all. You can contact me directly if you would like more information on this utility (it is not a Sleeter Group product). Ryan, I’m not sure that I would want to have my price markup based on average cost instead of the last cost purchased. Personally, marking up on my most current cost makes more sense. However, everyone has their own way to deal with this issue.

Depending on what QB product and year of product you have, there are different solutions. Enterprise 12 has an automatice price update feature (make sure you have the most current release, as older releases have bugs!) that is the only way to automatically update when a cost changes that I am aware of – but it works on “cost” not average cost.

I have a utility that will do updates of price based on the average cost, in addition to “cost”, but you have to manually run this when you want to update things. It works for some business situations, but not all. You can contact me directly if you would like more information on this utility (it is not a Sleeter Group product).

]]> By: RYAN http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/comment-page-1/#comment-99285 RYAN Fri, 27 Jan 2012 03:16:04 +0000 http://www.sleeter.com/blog/?p=151#comment-99285 Charlie I have an issue with QB along the same lines and wondering if you have an add on program. I have over 6000 Inventory parts in QB, with various costs depending when purchased, so i know all about QB using a bogus "cost" number entered at one time rather then average cost which would be more true, which is what id like to use to then markup my cost. I have actually gone through all parts and raised my pricing to a specific margin based on the average cost but its only accurate until the next time purchased, which could be the next day. We are a outdoor power equipment dealership so selling part over counter and in the backshop daily. Charlie I have an issue with QB along the same lines and wondering if you have an add on program.

I have over 6000 Inventory parts in QB, with various costs depending when purchased, so i know all about QB using a bogus “cost” number entered at one time rather then average cost which would be more true, which is what id like to use to then markup my cost.

I have actually gone through all parts and raised my pricing to a specific margin based on the average cost but its only accurate until the next time purchased, which could be the next day.

We are a outdoor power equipment dealership so selling part over counter and in the backshop daily.

]]> By: Charlie Russell http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/comment-page-1/#comment-38839 Charlie Russell Mon, 26 Sep 2011 18:07:37 +0000 http://www.sleeter.com/blog/?p=151#comment-38839 Mike, take a look at this article: http://www.sleeter.com/blog/2011/02/item-types-in-a-quickbooks-bill-of-materials/ You can use items to add "burden" to your assembly - labor costs, overhead, whatever you want. It can be a bit tricky to set up, you need to talk to your financial advisor on how best to do it in your particular situation. Mike, take a look at this article: http://www.sleeter.com/blog/2011/02/item-types-in-a-quickbooks-bill-of-materials/

You can use items to add “burden” to your assembly – labor costs, overhead, whatever you want. It can be a bit tricky to set up, you need to talk to your financial advisor on how best to do it in your particular situation.

]]> By: Mike Zee http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/comment-page-1/#comment-38838 Mike Zee Mon, 26 Sep 2011 18:04:18 +0000 http://www.sleeter.com/blog/?p=151#comment-38838 Hello and thank you for your article. It is very helful. My problem is accounting for labor and overhead in QB (QuickBooks). We have a small manufacturing operation, less then 30 people. Do you use the average hourly cost of labor based on the total cost of labor for the last 6 months or do you use the actual hourly rate of the person performing the direct labor? Do you calculate the overhead for the factory and add that onto the hourly labor rate? How do you do this in QB? Is there a good reference article on Basics of Labor and Overhead Manufacturing Accounting? Or a Labor and Overhead Manufacturing accounting for dummies Thank you in advance for your help Hello and thank you for your article. It is very helful.

My problem is accounting for labor and overhead in QB (QuickBooks). We have a small manufacturing operation, less then 30 people.
Do you use the average hourly cost of labor based on the total cost of labor for the last 6 months or do you use the actual hourly rate of the person performing the direct labor? Do you calculate the overhead for the factory and add that onto the hourly labor rate?
How do you do this in QB?
Is there a good reference article on Basics of Labor and Overhead Manufacturing Accounting?
Or a Labor and Overhead Manufacturing accounting for dummies

Thank you in advance for your help

]]> By: #QuickBooks Tip - Understanding QuickBooks Inventory Cost | QuickBooks for Contractors blog http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/comment-page-1/#comment-324 #QuickBooks Tip - Understanding QuickBooks Inventory Cost | QuickBooks for Contractors blog Thu, 10 Mar 2011 11:02:02 +0000 http://www.sleeter.com/blog/?p=151#comment-324 [...] a more detailed explanation of costs in inventory assembly items, see my article on Understanding Total Bill of Materials Cost in QuickBooks. Related PostsQuickBooks Tip – Determing Cost of Goods SoldQuickBooks Question – [...] [...] a more detailed explanation of costs in inventory assembly items, see my article on Understanding Total Bill of Materials Cost in QuickBooks. Related PostsQuickBooks Tip – Determing Cost of Goods SoldQuickBooks Question – [...]

]]> By: Charlie Russell http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/comment-page-1/#comment-310 Charlie Russell Wed, 09 Mar 2011 21:11:00 +0000 http://www.sleeter.com/blog/?p=151#comment-310 Olga: Look at the top screen, for WHAS. The <strong>avg cost</strong> is $32.00, and there are 6 on hand. 6X32 = $192.00 for the total value on hand for WHAS to start with. The build calculates a current cost of the components for WHAS to be $37.16596 each. And you are building four of them at that cost. 4X37.16596 = $148.66384 of total value that we are adding to inventory. $192 + $148.66384 = $340.66384 - that is the total amount of inventory valuation after the build. 6+4 = 10 is the total number of items that you have on hand after the build. So, after the build, you have $340.66384 of total cost, and 10 items. So, $340.66384 / 10 = $34.06638 as the new <strong>avg cost</strong> for the WHAS item Olga: Look at the top screen, for WHAS. The avg cost is $32.00, and there are 6 on hand. 6X32 = $192.00 for the total value on hand for WHAS to start with.

The build calculates a current cost of the components for WHAS to be $37.16596 each. And you are building four of them at that cost. 4X37.16596 = $148.66384 of total value that we are adding to inventory.

$192 + $148.66384 = $340.66384 – that is the total amount of inventory valuation after the build. 6+4 = 10 is the total number of items that you have on hand after the build.

So, after the build, you have $340.66384 of total cost, and 10 items. So, $340.66384 / 10 = $34.06638 as the new avg cost for the WHAS item

]]> By: Olga Sadkova http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/comment-page-1/#comment-309 Olga Sadkova Wed, 09 Mar 2011 19:32:08 +0000 http://www.sleeter.com/blog/?p=151#comment-309 Hello, Thank you for your article. It is very helful. But i am still confused in one step: Adding four WHAS with a total cost of 148.66384 to the value of 6 WHAS that were valued at 192.00 gives us a total inventory valuation of 10 WHAS for a value of 340.66384 So basicly here, we take total cost of 148.66 , calcilated based on avarage cost and adding 192.00, calculated based on BOL cost. So combination of two different costs give you an avarage cost for 10 eaches on hand. How is that posible? Thanks Olga Hello, Thank you for your article. It is very helful. But i am still confused in one step:

Adding four WHAS with a total cost of 148.66384 to the value of 6 WHAS that were valued at 192.00 gives us a total inventory valuation of 10 WHAS for a value of 340.66384

So basicly here, we take total cost of 148.66 , calcilated based on avarage cost and adding 192.00, calculated based on BOL cost. So combination of two different costs give you an avarage cost for 10 eaches on hand. How is that posible?

Thanks

Olga

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