Create an Item called Labor
(Must be an Inventory Part), instead of Asset Account = ?Inventory Asset?,
select the expense account that you post your salaries too. E.g. Payroll
Include the labor component
in bill of materials.
Labor will always be ?out of
stock? - so you must force status change (in NC go to Edit
--> Preferences --> Work
Orders and check ?force status?
When you finish production,
the labor cost will be deducted from Payroll expense and included in the cost
of your finished product.
You balance sheet and income
statement will properly reflect all your costs however your inventory
valuation report will show a negative amount for labor [AND WILL ALSO NOT
RECONCILE TO THE BALANCE SHEET BECAUSE OF THE NEGATIVE LABOR]. To clear
from within QB, go to
for account select Payroll
expense (the account you used as Asset Account when you created the item)
find the labor item and
put 0 for ?New Quantity?
in memo put ?to clear
labor from Status Report?
The net effect of this entry
will be zero because it?s a debit and credit is going to the same account.
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