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Sep 25, 2021 8:27 PM UTC
Solved

How to categorize molds purchased for goods manufacturing

Hello,

I saw a similar question asked but it wasn't answered, so here goes:

I get my goods (hats) manufactured to my designs via contract manufacturing/OEM so everything such as labor and materials is included in the price per item (COGS) except when new molds have to be created for new shapes.

In that case I am charged a fee for the first mold/prototype (size M) and if changes have to be made I am charged again for a 2nd mold and so-on. Upon final approval 3 new molds are made for the other sizes (S, L, XL) These molds are available for current and future production runs of that style.

My question is what would the journal entry be called? (prototypes doesn't quite fit) and is it an expense rather than cogs or asset? Thanks

 

Rustler
RustlerAnswer
Sep 26, 2021 11:06 AM UTC

It is an expense, I would use shop expense

 

journal entries should be avoided in QB, often they do not show in reporting

2 replies

Rustler
RustlerAnswer
Sep 26, 2021 11:06 AM UTC

It is an expense, I would use shop expense

 

journal entries should be avoided in QB, often they do not show in reporting

Irek1Author
Sep 26, 2021 3:59 PM UTC

got it, thank you!