Adding Labor Costs to Stock Manufacturing Using a Service Item

Adding Labor Costs to Stock Manufacturing Using a Service Item

Labor costs can be added to stock manufacturing by using a service item.

1. Setup a new service item

   1. Go to INV > Inventory > Item Maintenance > Add New Inventory Items

      1. Open

         

          

         1. Note: inventory drives to the ledger by product category. If a current product category does not exist with the correct ledger account mapping for labor costs, a new product category will need created in INV > Setup Information > Inventory Setup Options > 3. Add/Edit Product Categories

   2. Setup the Labor item as a type 1 Service item and assign to the appropriate product category

      1. Open

         

          

   3. Proceed to 3. Inventory Balances

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      2. Fill in the average cost field for the dollar amount to be used for labor costs. The average cost field is only used if the service item is a component of a formula or manufactured item.

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      3. Fill in any other desired fields on the item, then Save/Exit.

2. If a new product category was setup or existing mapping to the ledger needs changed, go to SJI > System Accounts > Inventory

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   2. Input the new or existing product category, select OK, and input the IV transaction code

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   3. Key the ledger account labor costs should post to, then select OK, and Yes for “Is this correct?”. If a new ledger account needs setup, this can be done in LDG > Maintenance Options > Chart of Accounts.

3. Add the service item to the manufactured item’s components

   1. Go to INV > Inventory > Item Maintenance > View / Edit Inventory Items > choose the manufactured item. Go to 5. Component Items

      2. Add the Labor item into the components of the manufactured item, then save exit

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4. When manufacturing in INV > Inventory > Stock Manufacturing, after choosing the item to be manufactured, selecting 2. Display Component Usage Data will show the labor and other items making up the manufactured item to verify.

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Notes:

• Only the IV transaction codes are affected in stock manufacturing

• The SJI coding will take the average cost of the IV service item code and credit to this ledger account defined in system accounts, then the IV code of the manufactured item is debited with the service item average cost, increasing the value of the product.

Written by S. Pykare