I am tring to set up a BOM for some motors that we are modifying. Pretty straight forward except that we would like to cost out the labour to two different G/L accounts. Can this be done? I tried setting up an "item" number for them calling them LAB REWIND and LAB MACHINE thinking I could use 1 hr for each as a component, but now realize that I would somehow have to have "stock" of hrs in order for the BOM to use these. I'm I trying something that's not possible?

Diane

Hi Diane,

I believe the way things are set up, this isn't possible. The Bill of Materials function will not allow either the Master or a Component item to use a 'user-specified' costing method, which is the required method for non-stock items.

What this means is that only Stock Items can be used in BOM processing. Non-stock items cannot.

If you do allow negative quantities in your Inventory, you could always create your Labour 'items' as Stock items and do BOM-building without worry of 'pre-stocking' items. Then every so often deal with those items. Note that doing this would affect all Inventory and allowing negative stock, and you'd have to be careful about Inventory valuation getting thrown by these 'labour items'. You'd need to map out how to proceed prior to setting anything up.

Also remember that to update different GL accounts for items, the GL activity is defined on the Control Account Set. This means you'd need separate control accounts for those items.

Thanks. I've been doing some trials and you are confirming exacting what I am finding out.

Thanks again for your help.

Diane,

If you wish to set up a the labour as "items" use a category and/or stock numnber starting with ZZ. Then you can easily exclude them from all the inventory sales and valuation reports by selecting the range carefully.

Hi Diane

Here are two ways to do what you want.

You want to use components A and B to make finished good C. You want to add $10 per unit additional cost to C, of which $5 gets credited to expense acct LAB REWIND and $5 gets credited to expense acct LAB MACHINE.

Scenario 1: This is the only finished good that has a BOM with additional costs, or all finished goods with additional costs have those costs split in the same percentage (in this case 50/50). You can do the split by setting up the Assembly Cost Credit account of the finished good to go to another GL account that is defined as an Automatic Reallocation account, and do the split in the GL.

Scenario 2: More than one finished good needs to have multiple additional costs, and the percentage varies. You create two BOMs. The first BOM uses components A and B and $5 of additional cost, and the finished good is a fake item AB. This item is linked to a new IC Control Account Set that has as its Assembly Cost Credit account the GL account LAB REWIND. The second BOM uses item AB as a component and $5 of additional cost, and the finished good is item C. Item C is linked to an IC Control Account Set that has as its Assembly Cost Credit account the GL account LAB MACHINE.

Scenario 1 is a longshot, but if it works for you, there is no additional work on your part. Scenario 2 is doable, but it requires you to do two assemblies each time you want to make item C.

Steve Schwartz