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.
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