How to allocate expenses to Inventory cost?

[Brucanna]

@raJ

I have to allocate all expenses to individual accounts, as like, Equipment rental expenses, Labor expenses, Prepaid tax expenses, etc. and also have to increase cost of the product at the same time

Please re-read the above responses which outline that that is impossible and as you have already stated “I understand and agree with all you said”, so why are you asking again.

@raJ

what way do you suggest?

That really depends on what costs should be considered as Freight-in costs of the product and which are variable costs. Freight-in costs are clearly identifiable as relating to the product and would be included in the product cost via the Freight-in feature whereas variable costs aren’t so clearly identifiable as relating to the product and therefore would be expensed.

Take note - Freight-in costs can’t be expensed as well and expensed costs can’t be Freight-in’s as well. Once you have come to terms with this - then read this guide

Allocating freight-in to the cost of inventory items when purchasing

When purchasing inventory items, freight-in represents the transportation cost associated with the delivery of goods from a supplier. For accounting purposes, the recipient adds this cost to the cost of the goods received. Let’s say you purchase an inventory item which has a $20 delivery fee. Rather than posting the $20 delivery fee to an expense account, you can add this cost to the cost of the inventory item. [image] By not entering anything into the Qty field of the second line item, the …

Then when you have “specific” examples with which you need assistance - please ask

PS: as an aside, it is noted in your balance sheet screenshot under the TEST PRINT BUTTON topic you are showing a Starting Balance Equity balance under the Equity section. That account indicates that there is a problem with your Starting Balances. - Please don’t respond to this comment in this topic.