I have a product (Product Z) which consists of Product A and Product B. I bought each of these 3 products from my supplier, I didn’t make the bundle myself so I treat Product Z just as a normal item.
Qty for each products:
Product Z: 1
Product A: 0
Product B: 0
A customer wants to buy only Product A. Since I don’t have any in stock, I took it out of Product Z and sell Product A. So now I have phisically:
Product Z: 0
Product A: 0
Product B: 1
While in Manager now:
Product Z: 1
Product A: -1
Product B: 0
What’s the best way to record this changes? All I can think of is make a sale of Product Z with the price of Product A, then make a purchase of Product A and Product B with $0 each so the qty will match.
Thanks, I’ve read the Production Order guide, but I think it’s a bit different in my case. I bought the bundled products from supplier (I didn’t make the bundle myself). And if I use Production Order when purchasing the bundled product, how do I split them again to individual products?
production order is made after purchasing a product.
this is clearly explained in the guide. finished goods will be your inventory A and Bill of materials will be inventory Z. you will have to create two production orders separately for A and B.
The problem with production orders is that you can only have one output item. (A change for multiple outputs has been a long-standing request.) Even if you use two production orders, you have nowhere to put the “other half” of Z when you create a production order for A or B. So that really does not work.
Use a journal entry instead. First, look up the current average cost of Z in the Inventory Items tab (not the sales or purchase price). Then decide how that should be split between A and B.
Next, make a journal entry for a date on or before the date you sell the item to the customer:
Debit Inventory on hand, Item A, Qty 1, at A’s apportioned cost
Debit Inventory on hand, Item B, Qty 1, at B’s apportioned cost
Credit Inventory on hand, Item Z, Qty 1, at Z’s current average cost from the first step
This adds one each of A and B to inventory at cost (not price) and subtracts one of Z from inventory at cost.
Enter the sales invoice or cash receipt as normal.
when an item A or B is taken out of Z, then the inventory can no longer be called Z.
so the remaining of Z has to be made B if A was initially taken out. so making two production orders would be the right thing to do (until multiple output is implemented) and solves the problem.
No, think about it. You start with Z as the input item. You end with A as the output item. All of Z is gone from the records, but you have no B in the records. You only have A. Yet you have a physical B sitting around in the factory or warehouse.
If you make a second production order with input of Z and output of B, you have reduced Z by two. But you actually only took out 1 Z. So while that solves the problem of the spare B that was left over from making A, it leaves you down by 1 Z in the records.
This whole thing would be so much easier if we could do multiple-output production orders. It doesn’t seem difficult to me, because its just the equivalent of the journal entry I described.
when splitting an inventory item Z, the bill of material quantity of Z in a production order should include only the quantity constituted by A.
for example, quantity of Z is 1 which include 1 of A and 1 of B.
so the first production order should be finished good A = 1, bill of material Z = 0.5
the second production order should be finished good B = 1, bill of material Z = 0.5
Well, I guess that is another way of doing it, as long as both production orders are entered simultaneously. If they are not, finished good B is unaccounted for. If you are going to do it this way, however, the fraction of Z consumed on the two production orders must match the fractional costs of A and B. If you just use 0.5 for both, Z’s cost will be split equally between A and B.
Here is what I mean. If Z costs 10, A costs 2, and B costs 8, then the first production order should use 0.2 of Z on the bill of materials to produce 1 of A. The second production order should use 0.8 of Z to produce 1 of B. That will make the average costs of A and B correct.