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Assembly transactions

  • 1.  Assembly transactions

    Posted 14 days ago
    We have just started distributing a new inventory item that requires assembly.

    We have defined the components that are used to make the assembly, and when we complete an assembly transaction, the component units and costs are reduced, and the assembly item units and costs are properly incremented.

    However, when we sell and ship an assembly item we have an issue:

    1. The inventory subledger correctly reflects a reduction in the # of assembled items in inventory
    2. The sales order shows the cost of the assembled item being sold = 0
    3. The GL shows the proper revenue, but a cost of sale of $0

    Does anyone have an idea what may be causing this issue?

    Thank you for your help!
    Greg DeBacker
    Regal Lager, Inc.
    678-231-8828






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    Gregory DeBacker
    Regal Lager Inc.
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  • 2.  RE: Assembly transactions

    GOLD CONTRIBUTOR
    Posted 13 days ago
    ​Have you assigned a cost to the product in the Item card?  Does each component have a cost associated with it so that the finished good has a cost?

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    Anne Provost
    Chief Financial Officer
    TNR Technical, Inc.
    Sanford FL
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  • 3.  RE: Assembly transactions

    Posted 12 days ago
    Hello Anne,

    The finished product has a current cost on the item card which is a function of the assembly transactions. These costs are reflected on the stock status report.  However they do not appear as a cost of the product on the sales order or resulting invoice.

    The components used to make the item have costs generated based on the various landed costs for the item.  These costs do appear to flow properly to the unit cost of the finished product.

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    Gregory DeBacker
    Regal Lager Inc.
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  • 4.  RE: Assembly transactions

    GOLD CONTRIBUTOR
    Posted 9 days ago
    ​Unless you calculate it ahead of time and assign it to the part, the cost for the assembled item is created when the assembly is posted.  Prior to posting your assembly, my guess is that there is no cost for the line item on your "maiden" order.  Try adding an assembled item that has not had an assembly posted for it yet, and for which no cost is assigned in the item card, to an order and the cost will likely be zero.  Once you are ready to post the assembly, post it and check to see if the line item for that order has been updated.  If it has not, try deleting the line item and re-entering it to see if the cost has been updated and is assigned to the line item.  I have seen this situation in the past, where my staff has either ordered an item with zero cost or sold a "maiden" assembly item and the cost at the order level remains zero after the item is received in at the correct cost or the assembly is posted and the cost to the item card updated.  The "fix" is to delete the line item and rekey it.


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    Anne Provost
    Chief Financial Officer
    TNR Technical, Inc.
    Sanford FL
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  • 5.  RE: Assembly transactions

    GOLD CONTRIBUTOR
    Posted 13 days ago
    One more thing:  If you have the sales transaction open when you post the assembly, the information for the line item cannot update.  The line item should allocate and assign cost when you post the assembly; if it does not, then you may need to delete the line item and rekey it so that it pulls the cost from the inventory card.  ​

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    Anne Provost
    Chief Financial Officer
    TNR Technical, Inc.
    Sanford FL
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  • 6.  RE: Assembly transactions

    Posted 12 days ago
    Anne, we receive orders before "building" the assembled item, so it would not be unusual for the order to have a line item with zero on hand, and the assembly would occur possibly the following day along with the assembly transaction posting.

    Then we would allocate the order, ship the order and invoice the order.


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    Gregory DeBacker
    Regal Lager Inc.
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  • 7.  RE: Assembly transactions

    Posted 12 days ago
    Ok...so I may be wrong here.  It looks like our customer service group is overriding the shortage and allocating the order before the assembled item is built, so I believe you have identified our issue.  I will have them change their procedure, and get back to the group.

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    Gregory DeBacker
    Regal Lager Inc.
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  • 8.  RE: Assembly transactions

    Posted 13 days ago
    Are you using kits? I have seen something similar when selling kits and someone forgot to properly add the components.





  • 9.  RE: Assembly transactions

    SILVER CONTRIBUTOR
    Posted 12 days ago
    Greg,
    What is the valuation method of your assembled item?  If Perpetual, did you do the assembly before posting the invoice?
    If Periodic, did you assign a standard cost to the parent item?

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    Andy Kennedy
    Principal Consultant
    Velosio
    Seven Hills OH
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  • 10.  RE: Assembly transactions

    Posted 12 days ago
    Andrew,  I will try to find out if the assembly was posted prior to posting the invoice...because I have now found two transactions for a given assembled item that have successfully posted with costs.


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    Gregory DeBacker
    Regal Lager Inc.
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  • 11.  RE: Assembly transactions

    Posted 12 days ago
    Hi Kirk,

    We do not use kits.  The assembled item has an itemtype of Finished good.

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    Gregory DeBacker
    Regal Lager Inc.
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