I have a client that purchases used equipment for refurbishing. They do not always know if an item can be refurbished at the time of purchase. One of the operations in production is to assess the item. If an item cannot be refurbished for sale, it gets put back into inventory in a quarantine location using a negative material transaction. Eventually the item is parted out using a disassembly production order to get as much value out of the item and the parted items are used for future repairs and refurbishments. There is labor incurred in the disassembly process however we cannot get the cost of labor allocated to the parted-out items. Is it possible to capitalize labor as part of the disassemble transaction? I tried recording a labor transaction as both a positive and negative and, in both cases, it ends up in the WIP adjustment entry for the difference between the parted-out items and the cost of the item being disassembled.
Allocate Labor to Cost of Disassembled Items
+3Are you asking if the labor time spent disassembling the refurbished item can be smoothed and applied to each parted-out item as it is received back into inventory?
Are you asking if the labor time spent disassembling the refurbished item can be smoothed and applied to each parted-out item as it is received back into inventory?
Hi
Hi
Hi, I’m working with a client in the same circumstance. In addition to finding a way to smooth the labor costs over the parted-out items (items being received during disassembly), they are trying to find a way to smooth over the total cost of the disassembled item over all of the parted-out items.
Example:
Disassembled Item is $500:
Made up of components:
A - $350
B- $25
C- $25
The total cost of the receipt components from disassembly is $400. This would create a WIP adjustment of $100 at time of disassembly. Is there a way to apply the $100 to receipt items A, B, C? The issue I assume is that the system would not know how to apply the total amount as each item could have different ‘weights’ (apply more to item A as it is a more valuable item).
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