DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Manufacturing to Inventory


#1

I have used manufacturing order to create a new inventory item which it worked fine, however my question is how to see inventory with sale price as it only uses cost so in the inventory I have raw materials and also one finished product which counts on cost so it doesn’t really make any difference at this point. If a finished product is ready for sale wouldn’t show on inventory according to sale price? (so basically you have more value on inventory, which improves business financial position). Thank you.


#2

I’m not sure whether this is even an acceptable accounting practice to do so, but, I will say that most businesses would avoid doing what you are describing because that would mean that you are trying to actualize profit before sale.

You may want to avoid actualizing profit before sale since sales aren’t guaranteed. This way, if under certain circumstances you choose to get rid of you inventory at reduced cost your loss on inventory will only occur if you go below your gross cost of manufacturing.


#3

I understand. its more clear now. Thank you!