The Employee Payroll Rates - US and Canada.The Self Employed Rates - US and Canada.The Travel/Auto Rates Options - US and Canada.Also, enter an adjusting journal entry to close Total Overhead Variance represented by the ending balance for MFG OVERHEAD (ACTUAL) to cost of goods sold. Observe cost rollup controlled by a multi-level BOM as QuickBooks rolls up the cost of RM_1 into WIP_1 and then rolls up costs of WIP_1 and RM_2 into the cost of FG_1.Įnter an adjusting journal entry to close Total Labor Variance represented by the ending balance for DIRECT LABOR (ACTUAL) to cost of goods sold. QuickBooks debits WORK-IN-PROCESS (FINISHED GOODS) for the cost of the newly manufactured parts, adds the quantity of the new parts to Inventory, and computes a new, weighted moving average unit cost for WIP_1 (FG_1). QuickBooks divides this total cost by the quantity of parts manufactured to determine the unit cost of each of the manufactured parts. Also, this entry adds the direct labor and manufacturing overhead charged by the Service Items described in step 6 above to the total manufacturing costs accumulated for the Build Assembly. This entry also credits RAW MATERIALS and WORK-IN-PROCESS for the costs of the consumed parts and rolls up these same costs into the total manufacturing costs accumulated for the Build Assembly.
When you enter a Build Assembly, QuickBooks subtracts from inventory the quantities and costs of RM and WIP components consumed. The manufacturing overhead Service Item charges applied manufacturing overhead to the cost of WIP_1 and FG_1 and credits MFG OVERHEAD (ACTUAL) for these same costs.Įnter a Build Assembly (comparable to a Shop Order in ERP) to manufacture WIP_1 parts, and then enter another Build Assembly to manufacture FG_1 parts. The direct labor Service Item charges standard direct labor costs to the cost of WIP_1 and FG_1 and credits DIRECT LABOR (ACTUAL) for these same costs. Set up WIP_1 with component RM_1 in its single-level BOM set up FG_1 with components WIP_1 and RM_2 in its single-level BOM and observe that using WIP_1 as a component in FG_1's single-level BOM creates a virtual, multiple-level BOM.Ĭreate two Service Items for charging direct labor and applied manufacturing overhead and include these Service Items as components of WIP_1 and FG_1. QuickBooks debits RAW MATERIAL using the purchase order costs, adds the quantities of the newly purchase parts to Inventory, and computes new, weighted moving average costs for RM_1 and RM_2. Purchase quantities of RM_1 and RM_2 parts. QuickBooks debits this account when incurring actual direct labor costs and credits this account when charging standard direct labor costs to the cost of manufactured parts. Set up DIRECT LABOR (ACTUAL) as a control account. Set up MFG OVERHEAD (ACTUAL) as a control account QuickBooks debits this account when incurring actual manufacturing overhead costs and credits this account when applying manufacturing overhead to the cost of manufactured parts.
Set up RAW MATERIALS, WORK IN PROCESS and FINISHED GOODS general ledger accounts. As such, the case is designed to be used in Accounting Information Systems (AIS) courses that are already using QuickBooks to help students' better understand the general concepts covered in AIS textbooks on the Production Cycle that are not addressed in extant textbooks on QuickBooks. Students learn the importance of configuring Off the Shelf (OTS) manufacturing systems in accurately costing manufactured discrete products, including setting up manufacturing accounts, employees, part numbers, and the BOM. Students set up raw materials, work-in-process and finished goods part numbers so that quantities and costs of parts on-hand are tracked in inventory on the Perpetual Inventory System to provide an inventory subsidiary ledger that continuously matches the manufacturing inventory account balances in the Chart of Accounts.
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Students learn how to configure QuickBooks so that direct materials, direct labor and applied manufacturing overhead costs charged to work-in-process parts manufactured at lower levels of the BOM are rolled up into the costs of higher-level work-in-process parts and, ultimately, into the costs of the finished goods parts. This education case is the first to use QuickBooks Premier Accountant to teach students foundation functionalities common to all Enterprise Resource Planning (ERP) systems that support discrete manufacturing.