Building assemblies affects COGS??

Question

I just looked at my P&L by class and found some of my COGS sitting in a different class than the rest of it. I double clicked on the COGS in the wrong class to drill down and found that the source transactions were Assembly builds. I can't figure out why. I assume that only Inventory should be affected by a Build, and even then, only shifted to one item from others. How could an assembly build possibly be affecting COGS? (or Class, for that matter, since there is no class assigned to the Inventory from which COGS would be drawn until one is indicated on the sales form) (Using Enterprise 5.0 Mfg& WS edition) Any ideas?

Then, when I deleted the build and replaced it with another, the COGS effect was maginfied to 5 times the size it was with the original build.

Clues?

Craig

Karl Irvin · Accepted Answer

This is no help but the 2005 sample manufacturing company also does this. It puts debits or credits in the "materials" expense account on some Assembly Builds. See builds on 11/01/07, 11/20/07 and 12/21/07.

I can't tell why it does this as there is no way to drill down to the calculation of the amount put into the materials expense account.

Karl Irvin · Answer

Well I see now. At the time of the Build, if the assembled part has a negative quantity, the ave cost of the negative qty assembled part is the ave cost that gets added to the assembly on a new assembly build. Any difference is charged/credited to cost of goods sold.

See the sample manufacturing company Inventory Valuation Detail report for

Assembly part 1500-PM

On 12/01/07 an invoice is issued and the Assembly goes negative 1 with an ave cost of 1,750.94

On 12/21/07 assembly build adds one new part at ave cost of 1,750.94

Actual cost of parts used in the 12/21/07 assembly is 1,936.79

But the Assembly Build only adds 1,750.94 to inventory and the diff of

185.85 is added to "materials cost" as COGS account.

Building assemblies affects COGS??

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