Paul,
You bring up a lot of interesting thoughts. The invoice to our customer,
does not use assemblies, we simply invoice each part on its own on the
invoice. So I checked each part in our system for any differences in
the way we set them up, and as far as I can tell, they all seem
identical, other than costs and name of the part. I need to know if this
is an isolated event, where, not every part on my invoice is being
picked up in COGS, or if this is potentially a universal problem.
Should I be using assemblies? Most every server we well to our customers
is very customized for them. We don't have a standard server that we sell.
Jeff
On 7/15/2010 10:56 AM, Paul Tammes wrote:
AFAIK it is FIFO indeed, documented that way as well iirc. Assemblies
are a whole other ballgame again i seem to recall.
Unless you work with serial numbers for all parts and scan the parts
per sale, I do not see any simple way around the FIFO method.
Unless you need other figures, it is a solid and approved method of
stock valuation.So no real problem apart from maybe a like or dislike
of this specific accounting method.
At one point in time, you bought a hard disk for price x1. Now you
sell a hard drive, COGS x1 is taken into account.
Suppose you bought a total of three hard disks, next time, COGS x2
will be used. Leaving the x3 still in stock at the right x3 COGS.
You did not CHECK the COGS before? Just changed the values to what
seems right?
Manually adjusting the level of inventory value means either taking a
profit or a loss on that specific balance day. Say you re-valued X2 to
X2 minus 200.
Two thing happen:
1) ALTHOUGH NO SALE WAS MADE, you book a profit / loss.
2) since nothing was actually sold, and no new disk of type x1 was
bought, cogs x1 has not changed. So cogs of X1 will still be used in
any future sale.
Now when you really DO sell a server or two, the booked prices are
off. Well, seeing this method of valuation it would be very strange if
they where right to be honest.
*Note *I think the ´last purchase price´ field might be manually
updated and maybe that would fix the drive to use the COGS you would
like to see.
But imho there IS nothing to be fixed, as the accounting method used
and the COGS you would like to see is not correct.
Just because I am interested in the total picture, the two servers,
where they put together as an assembly before the sale, or did you
enter all parts used on the invoice?
That again might be of impact.
If no amount was used for the memory, it may indeed be set up wrong.
Eg. as as a non-tracking item, or as a non-stock item.
Compare to the items that did register a COGS, although it may not be
the one you would like to see, in order to find out the reason it did
not pick up a cogs..
HtH,
Paul
2010/7/15 Jeff Kaminsky <[email protected] <mailto:[email protected]>>
Since 2002, I have been adjusting the dollar value of our cost of
goods sold to reduce inventory to what we believe the correct
inventory level should be. Every time, I'm increasing COGS and
decreasing Inventory. Recently since we've become a larger company
and face higher levels of scrutiny I have become more interested
in this particular phenomenon. So I ran a test case, we sold 2
expensive servers to a customer, and I immediately went into COGS
and Inventory to see if the correct figures were adjusted.
Quantities seem correct
Dollar amounts are not correct.
We sold
2 chassis, Inventory was decremented by 2, but COGS shows only the
cost of one of them
12 hard drives, Inventory was decremented by 12, but COGS does not
show the actual costs of the hard drives we bought, but took costs
based on obviously a FIFO (first in, first out basis),
16 pieces of memory, Inventory was correct, but... nothing shows
in COGS!!
There is more, but, the recorded costs for this sale were 9,613.50
and according to our purchase receipts it actually cost us
12,486.00. So I was wondering if anyone has seen this before, did
we set up some parts wrong, or use an odd character somewhere that
would make COGS react in this way?
Jeff
--
Jeff Kaminsky
Sr. Accountant
IX Systems
408-943-4100 ext 122
_______________________________________________
SQL-Ledger mailing list
[email protected] <mailto:[email protected]>
http://lists.ledger123.com/mailman/listinfo/sql-ledger
_______________________________________________
SQL-Ledger mailing list
[email protected]
http://lists.ledger123.com/mailman/listinfo/sql-ledger
--
Jeff Kaminsky
Sr. Accountant
IX Systems
408-943-4100 ext 122
_______________________________________________
SQL-Ledger mailing list
[email protected]
http://lists.ledger123.com/mailman/listinfo/sql-ledger
