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7/23/2008 1:28:29 PM
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bill_b
Posts 5
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How is EZJOB coming up with the cost of inventory items issued to jobs? I have been trying to figure it out on my own, but I'm at a loss. Thanks, Bill.
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7/23/2008 1:30:41 PM
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Amy
Posts 23
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it's my understanding that it uses FIFO (first in first out). so whatever you purchased the item for, that's what is applied to your job cost for the item. i do it a lot and never have had a problem with it.
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7/23/2008 1:33:25 PM
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bill_b
Posts 5
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Yes, I read about it using FIFO, but i can't reconcile it. The items I am having trouble with are not always the same price when I purchase them, so that might have something to do with it, not sure?
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7/23/2008 1:35:58 PM
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Amy
Posts 23
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yeah, i think it uses a formula for cases like that.
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7/23/2008 1:46:07 PM
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admin
Posts 122
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When an item is purchased through POs or Purchases, EZJOB creates an Item Lot record, which is basically the unit cost and quantity. You can review the lots for items on the Edit Inventory Item screen. So Bill, in your case, when you purchase an item at several different prices, EZJOB will record the quantity and unit price of each purchase. Then when it is time to issue the item to a job, EZJOB will browse through the item lots table (using FIFO) and create the cost based on the available lots for the item.
For instance, say you purchase Item1 Qty: 100, Cost: 2.50 on January 1st. Then you purchase Item1 Qty:50, Cost: 2.25 on February 1st. Then in March you issue 125 of Item1 to a job. The cost applied to your job will be 100 * 2.50 + 25 * 2.25 = 306.25.
That is a very simplified example, but hopefully it helps!
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7/23/2008 1:46:59 PM
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Amy
Posts 23
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beats figuring all that using excel spreadsheets like we used to!
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7/23/2008 1:53:22 PM
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bill_b
Posts 5
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Let me try to explain my scenario a little better:
I purchased 10 units at 42.19.
I issued 3 units to a job (system came up with 126.57, which makes sense).
I purchased 20 units at 41.26.
I issued 5 units to a job (system came up with 210.95, not sure why).
I issued 3 units to a job (system came up with 125.64, very confused by now).
I issued 3 units to a job (system came up with 123.78, I see where it gets this number, but don't know why).
Let me know?
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7/23/2008 1:55:48 PM
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admin
Posts 122
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Bill,
This is a great example. I will make this a sticky topic. Okay, first of all I reviewed the transactions, and everything is working exactly as it should. I copied your post and made some additions below:
I purchased 10 units at 42.19. Lot #1
I issued 3 units to a job (system came up with 126.57, which makes sense). Math: 3 * 42.19, Note: Lot #1 is the only lot that exists for this item so it's simply the quantity times the unit cost
I purchased 20 units at 41.26. Lot #2
I issued 5 units to a job (system came up with 210.95, not sure why). Math: 5 * 42.19, Note: Lot #1 still has 7 units so we take 5 units from Lot #1 since it was the "First In" and is now "First Out"
I issued 3 units to a job (system came up with 125.64, very confused by now). Math: 2 * 42.19 + 1 * 41.26; Notes: Now Lot #1 has 2 units remaining and Lot #2 still has 20 units remaining. So, we take the two remaining units from Lot #1 and we take 1 unit from Lot #2.
I issued 3 units to a job (system came up with 123.78, I see where it gets this number, but don't know why). Math: 3 * 41.26; Notes: Lot #1 no longer has any units in it, so we take 3 units from Lot #2.
Let me know if that clarifies things for you.
edited by admin on 7/23/2008
edited by admin on 7/23/2008
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