kitting white paper

Microsoft Dynamics™ NAV 5.0

Kitting

Technical Whitepaper

This whitepaper is intended for professionals who are involved in the

implementation and support of the Kitting functionality at a customer

site, as well as for those who need to advise customers, or make

modifications within the area. The paper offers an overview of the

principles used within the Kitting area of Microsoft Dynamics NAV 5.0.

Date: March, 2007

www.microsoft.com/dynamics/nav

EFFECTIVE

http://www.microsoft.com/dynamics/nav

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KITTING FOR MICROSOFT DYNAMICS NAV 5.0 – WHITEPAPER

Table of Contents

Introduction ....................................................................................................................... 3

Architectural Considerations ....................................................................................................................................................... 3

Creation and Maintenance of Kits ................................................................................... 5

Defining a Kit BOM ......................................................................................................................................................................... 5

Building to Stock and Purchase Orders .................................................................................................................................. 5

Instant Production ...................................................................................................................................................................... 6

Disassembly ................................................................................................................................................................................... 6

Order Processing of Kits ................................................................................................... 8

Order Processing.............................................................................................................................................................................. 8

Gross Requirement Calculations ............................................................................................................................................. 11

Stockout Warning ......................................................................................................................................................................... 11

Order Promising ........................................................................................................................................................................11

Reservations and Item Tracking ..........................................................................................................................................11

Combined Shipments ..............................................................................................................................................................11

Costing .............................................................................................................................................................................................. 12

G/L Posting Considerations ...................................................................................................................................................... 12

Warehouse Management of Kits ................................................................................... 13

Planning ............................................................................................................................................................................................ 13

Reports .............................................................................................................................................................................................. 14

Kit Component - Statistics .....................................................................................................................................................14

Kit – Availability ..........................................................................................................................................................................15

Miscellaneous notes .................................................................................................................................................................... 16

Appendix A – Costing Scenario for Kitting ................................................................... 18

Appendix B – Ledger Entries for the Kitting Costing Scenario .................................. 20

Appendix C – Adjustments for Disassembly ................................................................. 24

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Introduction

Kitting for Dynamics NAV 5.0 is a process by which individual items are grouped or packaged together

to represent a single item. A kit is represented by a Bill of Materials structure, built or disassembled

with a BOM Journal, and sold on order.

Kits are handled in two different ways:

Kits are stocked, that is, a pre-assembled kit is kept in stock as a finished item and can be

used in the immediately fulfillment of sales orders.

Kits are not stocked, that is, a kit is not assembled prior to shipment, but is put together at the

time of sales order picking and shipping.

The Kitting functionality also includes disassembly, where the individual kit components can be

returned to inventory. An item can use one kit BOM for assembly and another one for disassembly.

Architectural Considerations

The Kitting functionality has been re-designed to rely on the existing functionality surrounding a

Production BOM while having as little impact on the Manufacturing module as possible. The Assembly

List tables and forms were not removed from the latest version but they are no longer used.

The reuse of Production BOM functionality to perform Kitting tasks provides significant benefits,

including:

The same costing routines are now used for both Production and Kitting.

Forecasting and MRP calculations consider kits and their components.

The Kit BOMs are stored in the Production BOMs tables with a special Kit flag. The kits are

assembled from a sales order rather than from a production order. However, kit BOMs cannot

be used in Production nor can production BOMs be used for Kitting.

The granules are set up to allow enough access to Production and Manufacturing functionality so that

Kitting works without requiring a customer to buy the granules. However, the Kitting functionality is

still not a substitute for the more fully functional Manufacturing granule.

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Setting Up Kit Parameters

Kitting tabs have been added to several forms, providing flexibility when setting up Kitting

parameters. For example, you can print or suppress component lines when printing sales

orders/quotes, packing slips/shipments, invoices and pick tickets. Many of these setup parameters are

found on several forms, allowing you both to create a global default, and to tune the setting by

customer or item.

Hierarchy for or printing on Sales Orders, Packing Slips, and Invoices:

Use the setting on the sell-to customer for the order. If blank, then

Use the setting on the Sales & Receivables Setup.

Hierarchy for printing on Pick Tickets:

Use the setting on the Inventory card for the line item of the order. If blank, then

Use the setting on the sell-to customer of the order. If blank, then

Use the setting on the Inventory Setup.

The item card now allows two different kit BOMs to be specified, one for building a kit and one for

disassembly of the kit. By default, both kits are set to the same BOM after the first kit BOM is entered.

A Kit BOM cannot be assigned to a Stockkeeping Unit or to an Item Variant.

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Creation and Maintenance of Kits

Defining a Kit BOM

The setup of a Kit BOM is very similar to the setup of a Production BOM. A Kit BOM number is used

and items and resources are added as the first level of the BOM. Kit BOMs can include items,

resources (expended for each items), and setup resources (expended once during a build cycle).

However, Kit BOMs are limited to a single level BOM.

Calculation of standard cost on a Kit item works in the same way as for a true manufactured item.

Additionally, multiple units of measures are supported for both items and resources.

Building to Stock and Purchase Orders

A kit can be assembled as a finished good using the BOM journal. When the user selects a kit item in

the BOM journal, the components will automatically be added to the BOM Journal Lines. It is not

possible to insert or delete components in a BOM journal. However, the user can identify attributes of

the components that have been used to build the kit, such as serial/lot numbers or Bin Code, and the

components specified for the costing method.

The dimension values for kit components will always have the same dimensions as the kit item; they

are not editable in this version.

Item availability is not currently available from the BOM journal. However, viewing is possible by doing

a lookup on the item in question and then checking item availability from the item card.

A print option, which is similar to the print option on the Item Journal, has been added to the BOM

journal form. The report can be used as a simple pick ticket or put-away list.

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Purchase orders can be used to bring stock into inventory. Kit items are treated like any other item on

the purchase order. Inter-company purchase orders, generated from sales orders, for kits being

purchased into stock, are supported. However, kit components on purchase orders are not supported.

Instant Production

One of the goals for the Kitting solution was to produce a kit in an instant production without being

limited by costing methods. With the previous Assembly List solution, the cost of the BOM was

determined at the time of posting of the BOM. Any changes to the components cost afterwards did

not update the BOM cost.

By using existing Manufacturing functionality, this issue will be resolved. By simulating posting of a

production order, the system will actually post to the WIP accounts. Since it will be instant production,

debit will equal credit, but the user will still have to set these up.

If there are resource costs involved when assembling a kit, the cost will, after inventory adjustment

and posting to G/L, be left as a balance in the account that has been set up for the kit‟s WIP account,

in Inventory Posting Setup. This balance should offset a labor account, and be a part of the Cost of

Goods section in the Chart of Accounts.

Resource components are processed outside the manufacturing functionality. The cost from a

resource will be posted in a similar way as the indirect cost percentage on the kit item, but it will end

up as a value entry equal to the direct cost for the finished kit. In this manner, everything in the adjust

cost routine works correctly.

Disassembly

A disassembly choice was added to the BOM Journal to support the disassembly of kits.

The disassembly is processed as a negative adjustment for the kit, and positive adjustments for the

item components. A positive number will always be entered into the BOM journal and the

assembly/disassembly selection will determine whether the posting will result in an increase or

decrease of the kit item.

If there is any difference in the cost between the kit being taken out of inventory, and the total cost of

components going back into inventory, it will be posted as an expense. The expense G/L account is

identified as a new field in General Posting Setup. It is the combination of the kit‟s General Product

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Posting Group and the blank General Business Posting Group that determines which record to use in

the posting setup matrix. The offsetting account is the kit‟s inventory adjustment account.

If the kit BOM for the kit item‟s “Kit Disassembly BOM No.” includes resources, then these resources

will also be posted as expenses. In this case, posting will still be to the “Cost of Disassembly Account”

for the kit, but the offsetting account will be the “Direct Cost Applied Account” for the combination of

the General Product Posting Group and the blank General Business Posting Group.

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Order Processing of Kits

The demand for a kit item on a sales line can be fulfilled in one of three ways:

The kit will be assembled prior to shipping. This will happen when the kit is built as an instant

production.

The item is stocked in inventory. This can be either because the kit has been assembled as a

finished item ahead of time by using the BOM journal, or because it has been received from a

purchase order.

The sales line can be linked to a purchase order as a drop shipment or special order. In this

case, a kit item is considered a normal item.

If a demand for a kit on a specific order can be met by a combination of the above three methods,

then the sales line must be split into multiple lines. It is not possible to use multiple methods for a

single order line. In other words, you cannot order five kits for an item that has three in stock, have the

three come from stock, and then build two. You must use separate sales lines in this scenario.

Order Processing

The sales order form recognizes kit items when it finds an entry in the Kit BOM No. field. Another field

called “Build Kit” controls whether items are shipped from stock or if they are built at time of shipping.

If the field is checked, components are allowed in the Kit Sales Line form. The underlying kit

components on a sales order will only show up on the Kits Sales Lines form, if the Automatic Build Kit

flag is set, as defined in the first scenario listed above. The components will never be set up for a

shipment from stock, a drop shipment, or special order.

A kit item can still be shipped from inventory as a regular item by simply un-checking the “Build Kit”

flag. If any components were already present as kit sales lines, the user will be prompted to delete

these records first. Re-checking the Kit Build flag will start building the kit again. A function called

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Refresh Kit BOM can also be used to delete any existing kit sales lines and replace them with the

original kit components.

Components can be reviewed in a Kit Sales Lines form.

The user can insert and delete lines, as well as editing the following fields:

Quantity per (number of the component is needed to build one kit)

Variants

Multiple units of measures for items and resources

Bin code

Reservations

Item tracking

The following fields and features are not supported for Kits Sales Lines:

Extended texts

Discounts (discounts are applied to the kit item, not to the individual components)

Dimensions (dimension values for kit components will always have the same dimensions as

the kit item; they are not editable in this version)

Substitutions

Cross references (only supported at item level)

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Changes to location code. The location code is inherited from the kit item. If the Build Kit flag

is turned off, the location can be changed just like any non-kit item. The Build Kit flag can

then be turned back on, recreating the kit lines with the new location.

Two new functions will be available in the Kit Sales Lines form.

The Roll-Up Kit Pricing function will recalculate the sales line price as the sum of the component prices

if the process is allowed by the Roll-Up setting on the item card. This setting can be set to

automatically roll-up prices, allow manual roll-up, or not allow roll-ups.

The Roll-Up Kit Costs performs a similar function by rolling up the costs. However, the cost on the

order line is only an estimate, as the actual costs will be applied when posting occurs.

The Kitting features are available within the sales module for quotes, orders, blanket orders and

invoices. Return orders and credit memos are not supported. Returned kits can be disassembled using

the BOM Journal.

A new form with more detailed information on item availability for kit components was added to the

Sales Order form. However, the Copy Document function uses the standard item availability form

when copying an order with kit items. Combining forms will be considered for future versions.

There will be no support for Kitting within the Service Management, Commerce Portal/Gateway, or

BizTalk Document Transfer areas. When a user tries to send an order via BizTalk and the Build Kit flag

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is set, an error will be displayed. If a class is assigned in the Commerce Portal, to a kit item with a Build

Kit flag, an error will be displayed.

The Kit Sales Line table will be copied into a similar table for archiving.

A menu option has been added to the Sales Order form. Also, a Print menu button is visible, similar to

the print option for Work Order. The report can be used as a simple pick ticket and can be printed

with or without kit components.

Gross Requirement Calculations

A new “demand type” is introduced by adding a Kit Sales Line to hold component usage for a Kit Item

on a sales line. This new demand is considered in the Gross Requirement Calculations throughout the

system so that gross requirements are a sum of quantities from all existing sources, plus the new Kit

Sales Line table.

Stockout Warning

A new form has been added for the stockout warning of the Kit Item to make it easier to determine

availability of the Kit Item, based on the availability of the kit components. The principles of

requirement calculations are the same as in the standard stock out warning form.

Availability is performed for a kit, as well as the components based on the Build Kit flag. If the Build Kit

flag is set, all the components will be checked for availability and displayed. If the Build Kit flag is not

set, the kit item will be checked for availability in the same way as a regular item, but the form that will

be displayed will still include information for all the components.

Order Promising

The user has access to the Order Promising form at the component level. The current line (component

item) will appear in the form, as well as all components for the kit, allowing viewing availability options

for the kit as a whole. If the user selects Order Promising for an order line, the system will check the

Build Kit flag. If Build Kit is set, all the component items will be displayed in the Order Promising form.

If the flag is not set, Order Promising will work as seen previously, as the item is treated as a normal

stock item.

When the user accepts the records in Order Promising, the latest of all the Earliest Shipment Dates will

be used to update Shipment Date on the kit sales line itself. The shipment dates will also be updated

on the component lines.

The user can enter a date in “Planned Delivery Date” or “Earliest Shipment Date” which will trigger

recalculation of the other date. Since all five ship/delivery dates do not exist on the kit sales line table,

the kit sales line itself will be simulated for recalculation of the dates. However, it will be the

component item with its extended quantity that will be used for available/capable calculations.

Reservations and Item Tracking

Reservations and Item Tracking are supported for the kit sales lines table. In the case where a new

serial number is entered for a new kit, the warning about creating a non-existent serial number will be

displayed in this version.

The “Check Shipments with Invoices” flag must be checked for item tracking to operate with Kitting.

Combined Shipments

The Kitting functionality does not support combined shipments for items that are flagged as “Build

Kit.” Any items flagged as “Build Kit” will be filtered out of the process when orders are combined. Kit

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items that are being delivered from stock or purchased directly into stock can be combined just like

any other non-kit item.

Costing

When a disassembly BOM journal is processed, entries are added to the average cost calculation table

at zero cost. The Adjust Cost routine updates the Net Invoiced Quantity and the costs in this table and

ensures that all costing is correctly calculated for disassemblies. It is also updating the invoiced

quantity of the item ledger entries created during instant production.

G/L Posting Considerations

During the posting of an assembly using the BOM Journal, the net G/L transaction puts the costs in

finished goods (debit) with an offset to raw materials (credit).

During disassembly, the net G/L transaction debits Inv. Adj. Retail and credits Finished Goods to

remove the finished good from inventory. Then raw materials are debited and a credit is applied to

Inv. Adj. Raw Materials.

See Appendix A and Appendix B for a detailed costing scenario with resulting ledger entries.

When the Adjust Cost routine is executed, the disassembly transactions will not be adjusted in sync

with the originating assembly transaction. The disassembly transaction is not linked to the original

assembly transaction. It is possible that the raw materials account and the Inv. Adj. Raw Materials

account are understated by the amount of the adjustment, and would not balance to each other. This

difference would be due to the disassembly cost adjustments. A manual adjustment to raw materials

must be made for the difference between the two adjustment accounts. See Appendix C for an

example of how this adjustment is calculated for the scenario in Appendix A and B.

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Warehouse Management of Kits

There are no changes in the processes for handling kits that are already in stock in a warehouse

environment. However, the process for kits built from sales orders, represents pulling components

rather than the pulling the finished kit item itself. The “Build Kit” field on the sales line controls this

process change.

Kit items are built when shipments are posted. The shipments cannot be posted until there are

enough components in stock to build the kits, as the kits are built internally as an instant production

order. For these items, invoices can only be created when shipments are completed.

For locations that don‟t require shipping or picking, the reports used for pick/pack will be changed to

print components along with the kit based on the print setups selected. In this case, it is up to a user

to manually change the “Qty. to Ship” field on the sales line, before posting the order as a shipment.

For locations that have been set up to require picking, the pick routine has been changed so that the

components can be picked before the kit can be shipped. Only the components will be inserted as

pick lines instead of the kit item. When registering the pick, the system will check that components

have been picked to build a whole number of kits. Incomplete kits are not supported. Partially

shipping of the kit is allowed, for instance shipping four out of five kits, but only if all components for

four kits have been picked.

When warehouse shipments are processed with a kit item and the location requires shipping, the

location also requires picking. This process change was made so that the relationship between a

warehouse shipment line and the order line is not changed. When posting a warehouse shipment,

“Qty. to Ship” is updated on the associated order line directly with the value from the warehouse

shipment line.

Pick tickets are generated for components so that the picked components and their quantities can be

reported for entry into the system. If the Item Tracking Code on the components item card is set up

for SN or Lot Warehouse Tracking, the Serial and/or Lot No. on the pick lines can be entered.

Otherwise this information must be keyed in from the order entry form.

If the location is set up to require picks, but not require shipments, the components will go into the

inventory pick. Instead of updating the warehouse shipment with “Qty. to Ship,” the “Qty. to Ship”

field directly on the order is updated when posting the inventory pick. Full and complete kits must be

picked here as well.

The Pick Qty. and Pick Qty. (base) fields in the Kit Sales Line table are only used for the pick through

warehouse shipment functionality, not for inventory pick directly from the sales order. The sales order

already has quantity defined in the Qty. to Ship field.

Planning

Kitting will use planning features available for production BOMs. However, when the planning

functions are looking for demand in sales lines, it will act differently based on whether a kit item is to

be fulfilled from stock, or is being built as an instant production.

When the “Build Kit” flag is checked for a sales line, the kit item will be replaced in the planning with

demand from the associated kit sales lines. If the Build Kit flag is not checked, the value will still be

included in the requisition line. However, since the replenishment system uses a production order for

kit items, and a production order for a kit BOM is not allowed, the kit item should either be assembled

in the BOM journal or purchased.

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Replenishment from a journal is not supported, and the user will get an error if a kit item is brought

into a production order. The flag called “Accept Action Message” will default to No. for kit items and it

can only be set if the replenishment system is changed to Purchase.

Reports

Several reports that print BOM information from the Manufacturing information will also be made

available for printing information about Kit BOMs. Existing item reports will work for kits as well. Three

new reports have been introduced to provide additional analysis on kit sales and availability.

Kit Component - Statistics

This report is an analysis of the kit components and the corresponding kit items. It is a “where sold”

list for components that reports on the number of components sold in kits. It also lists the quantity of

the component that were sold separately and not as a part of a kit.

The report can be run as a summary or in detail. Summary mode shows the component with quantity

sold in kits and also separately. Detail shows the kits in which the components were sold.

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Kit – Availability

This report is similar to the existing Inventory Availability report, but only displays kit items. The kit

item and its components are displayed and the projected available balance for each component is

used to calculate the number of potential kits. Each kit item and its components are considered

separately as if they were the only kits being built.

Kit/Component – Sales

This report is an analysis of the kit components and their margin contribution. It is a “where sold” list

that reports on the margin contribution for the each kit the component was included in. Component

sales that were not part of a kit are also included. An example of these sales could be components

being sold as a repair part.

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The report is based on several assumptions, described below, and should be considered an analysis

report, not a financial report to balance.

If the kit was built from a sales order, then the actual costs of the kit components are included in the

calculation based on the values in the item ledger. For items taken from stock or purchased to stock,

the cost represented by the costing method on the inventory card, is used. If any of these costs are

equal to zero, then the standard cost is used. If that value is zero, then the item will not be displayed

in the report.

The total margin on the kit item is calculated based on the revenue and total cost applied to the kit at

posting (revenue minus total cost). Margin from the kit sale is then allocated to each component

based on the percentage of the actual cost that the kit component represents for each sales line. For

example, if the individual component cost is 10% of the total kit cost for a sales line, then 10% of the

margin is allocated to the component. If the item was shipped from stock or purchased instead of

being built from a sales order, then margins are allocated based on current component costs.

Resource costs are considered during the calculation of margins and costs. The total cost of the kit

includes the cost of the resources expended to ship it. The margin is calculated as sales minus total

cost, so the resources are costs removed from the margin.

Resources are also used in the allocation of component margins. For example, if 20% of the costs of a

kit are resources, then 20% of the margin is removed from the allocated margin. Otherwise, the

additional 20% margin would be allocated to the kit components, inflating the margin for the kit

component.

The unit cost and margin can be different for each sale. The unit cost on the report is derived from the

total costs allocated to all the components used in a kit item, divided by the total components sold.

The margin percentage on the report is derived from the total margins calculated for all sales lines,

where a kit item was sold, divided by the total sales.

Miscellaneous notes

The Kitting functionality replaces the Assembly List functionality. Many reports had a request field

called “Bill of Materials” which is no longer available because a kit item is identified as an item with a

kit BOM attached instead of by a checkbox. The request field has been removed from the reports and

the user can set a similar filter for “Kit BOM No.<>,„‟ to obtain the same results.

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The existing assembly lists will be converted into kit BOMs using the new table structures.

The “Explode” function used in the Assembly List functionality was modified to read the new tables

used for the Kitting functionality. This function works in the same manner it did prior to Kitting.

However, if you explode a kit item, you can no longer take advantage of the Kitting functionality, since

the kit item no longer exists on the order.

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Appendix A – Costing Scenario for Kitting

Setup

Entity Number Description Other Info

Inventory Setup Check Automatic

Cost Posting

Check Expected

Cost Posting

Set Automatic

Cost Adjustment

to Always

Item Kit123 Finished Good Set costing method to Average Cost

Kit1 Component 1 Costing Method = Average



Resource Setup Setup Charge Set Unit Cost to 30

Labor Labor Unit Cost = 10

Kit BOM K123-A Assemble Finished Good

Lines 1 Kit1 Quantity = 2

2 Kit2 Quantity = 1

3 Kit3 Quantity = 1

4 Setup Quantity = 2

5 Labor Quantity = 2

Kit BOM K123-D Disassemble Finished Good

Lines 1 Kit1 Quantity = 2

2 Kit2 Quantity = 1

3 Kit3 Quantity = 1

4 Setup Quantity = 1

5 Labor Quantity = 1

Item Kit123 Finished Good Set Kit BOM No. to K123-A

Set Kit Disassembly BOM No. to K123-D

Initial Purchase

Create a Purchase Order and post it through; Posting Date = 06/01/07:

Item Quantity Direct Unit Cost

Kit123 2 217

Kit1 10 25

Kit2 10 73

Kit3 10 44

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Purchase of New Components


Kit1 40 25

Kit2 20 73

Kit3 20 44

Assemble the

Kits

Post a BOM Journal line, assembling ten of Kit123, Posting Date = 06/16/07

Sell some Kits

Post a Sales Invoice, selling four of Kit123, Posting Date of 06/17/07.

Disassemble some Kits

Post a BOM Journal line, disassembling four of Kit123, Posting Date of 06/30/07

Adjust and Invoice the Component Purchase


Kit1 40 30

Kit2 20 75

Kit3 20 45

Purchase of New Components

Create a Purchase Order, Posting Date = 06/15/07, this time posting through:


Kit1 40 30

Kit2 20 75

Kit3 20 45

Assemble the

Kits

Post a BOM Journal line, assembling 10 of Kit123, Posting Date = 06/16/07

Sell some Kits

Post a Sales Invoice, selling four of Kit123, Posting Date of 06/17/07.

Disassemble some Kits

Post a BOM Journal line, disassembling four of Kit123, Posting Date of 06/30/07

Note: The Adjust Cost routine must be run when cost adjustments are made.

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Appendix B – Ledger Entries for the Kitting Costing Scenario

Purchase - Kit Item + Components - Inventory posting to G/L

Posting

Date

Document

No.

G/L Account

No.

Description Amount Entry No.

6/1/2007 108028 2115 Direct Cost 10000 on

01/06/07

434.00 2764 Inventory A/c for Finished Kit

6/1/2007 108028 7791 Direct Cost 10000 on

01/06/07

-434.00 2765 Direct Cost Applied, Cap.

6/1/2007 108028 2125 Direct Cost 10000 on

01/06/07

250.00 2766 Inv A/c for Kit Comp

6/1/2007 108028 7291 Direct Cost 10000 on

01/06/07

-250.00 2767 Direct Cost Applied, Raw mat.

6/1/2007 108028 2125 Direct Cost 10000 on

01/06/07


6/1/2007 108028 7291 Direct Cost 10000 on

01/06/07


6/1/2007 108028 2125 Direct Cost 10000 on

01/06/07


6/1/2007 108028 7291 Direct Cost 10000 on

01/06/07


Purchase - Kit Item + Components - G/L Transactions

Posting

Date

Document

No.

G/L Account

No.


6/1/2007 108028 7210 Order 106024 1420.00 2772 Purch., Raw Materials - Dom.

6/1/2007 108028 7110 Order 106024 434.00 2773 Purch., Retail - Dom.

6/1/2007 108028 5410 Order 106024 -1854.00 2774 Vendors, Domestic

Purchase - Receipt of components - Inventory Posting to G/L

Posting

Date

Document

No.

G/L Account

No.


6/15/2007 107030 2126 Direct Cost 10000 on

15/06/07

1000.00 2775 Inv A/c for Kit Comp Interim

6/15/2007 107030 5530 Direct Cost 10000 on

15/06/07

-1000.00 2776 Inv. Adjmt. (Interim), Raw Mat

6/15/2007 107030 2126 Direct Cost 10000 on

15/06/07


6/15/2007 107030 5530 Direct Cost 10000 on

15/06/07


6/15/2007 107030 2126 Direct Cost 10000 on

15/06/07


6/15/2007 107030 5530 Direct Cost 10000 on

15/06/07


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Assembly - Inventory posting to G/L

Posting

Date

Document

No.

G/L Account

No.


6/16/2007 B00001 2116 Direct Cost KIT123 on

16/06/07



16/06/07

-2170.00 2782 WIP Account, Finished goods


16/06/07

-500.00 2783 Inv A/c for Kit Comp


16/06/07

500.00 2784 WIP Account, Finished goods


16/06/07



16/06/07



16/06/07



16/06/07



16/06/07



16/06/07



16/06/07



16/06/07


Assembly - Adjustment

Posting

Date

Document

No.

G/L Account

No.



16/06/07

-2170.00 2793 Inventory A/c for Finished Kit


16/06/07



16/06/07



16/06/07


Sale - Inventory posting to G/L

Posting

Date

Document

No.

G/L Account

No.


6/17/2007 103022 2115 Direct Cost 10000 on

17/06/07


6/17/2007 103022 7190 Direct Cost 10000 on

17/06/07

788.00 2798 Cost of Retail Sold

22


Sale - G/L Transaction

Posting

Date

Document

No.

G/L Account

No.


6/17/2007 103022 6110 Order 1001 -

1000.00

2799 Sales, Retail - Dom.

6/17/2007 103022 2310 Order 1001 1000.00 2800 Customers Domestic

Disassembly Posting - Inventory Posting to G/L

Posting

Date

Document

No.

G/L Account

No.



30/06/07



30/06/07

788.00 2802 Inventory Adjmt., Retail


30/06/07



30/06/07

-200.00 2804 Inventory Adjmt., Raw Mat.


30/06/07



30/06/07



30/06/07



30/06/07


Disassembly Posting - G/L Transaction

Posting

Date

Document

No.

G/L Account

No.


6/30/2007 B00002 7500 Disassembly of KIT123 120.00 2809 Cost of Disassembly

6/30/2007 B00002 7170 Disassembly of KIT123 -120.00 2810 Inventory Adjmt., Retail

6/30/2007 B00002 7500 Labor for Kitting 40.00 2811 Cost of Disassembly

6/30/2007 B00002 7791 Labor for Kitting -40.00 2812 Direct Cost Applied, Cap.

6/30/2007 B00002 7500 Lift for Furniture 30.00 2813 Cost of Disassembly

6/30/2007 B00002 7791 Lift for Furniture -30.00 2814 Direct Cost Applied, Cap.

Purchase Invoice - Inventory Posting to G/L

Posting

Date

Document

No.

G/L Account

No.


6/15/2007 108029 2126 Direct Cost 10000 on

15/06/07

-1000.00 2815 Inv A/c for Kit Comp Interim

6/15/2007 108029 5530 Direct Cost 10000 on

15/06/07

1000.00 2816 Inv. Adjmt. (Interim), Raw Mat

6/15/2007 108029 2125 Direct Cost 10000 on

15/06/07


6/15/2007 108029 7291 Direct Cost 10000 on

15/06/07


6/15/2007 108029 2126 Direct Cost 10000 on

15/06/07


23


6/15/2007 108029 5530 Direct Cost 10000 on

15/06/07


6/15/2007 108029 2125 Direct Cost 10000 on

15/06/07


6/15/2007 108029 7291 Direct Cost 10000 on

15/06/07


6/15/2007 108029 2126 Direct Cost 10000 on

15/06/07


6/15/2007 108029 5530 Direct Cost 10000 on

15/06/07


6/15/2007 108029 2125 Direct Cost 10000 on

15/06/07


6/15/2007 108029 7291 Direct Cost 10000 on

15/06/07


Purchase Invoice - G/L Transactions

Posting

Date

Document

No.

G/L Account

No.


6/15/2007 108029 7210 Order 106025 3600.00 2827 Purch., Raw Materials - Dom.

6/15/2007 108029 5410 Order 106025 -3600.00 2828 Vendors, Domestic

Purchase Invoice – Adjustments

Posting

Date

Document

No.

G/L Account

No.



16/06/07



16/06/07



16/06/07



16/06/07



16/06/07



16/06/07



16/06/07



16/06/07


6/17/2007 103022 2115 Direct Cost 10000 on

17/06/07


6/17/2007 103022 7190 Direct Cost 10000 on

17/06/07

33.33 2838 Cost of Retail Sold


30/06/07



30/06/07

33.34 2840 Inventory Adjmt., Retail

24


Appendix C – Adjustments for Disassembly

(For examples above)

Actual Disassembly As Shown

Manual

Adjust Net

Inventory A/c for Finished Kit 787.99 33.34 821.33 0.00 821.33

Inv A/c for Kit Comp 3918.00 0.00 3918.00 40.00 3958.00

Inventory Adjmt., Retail 734.68 -33.34 701.34 6.66 708.00

Inventory Adjmt., Raw Mat. -668.00 0.00 -668.00 -40.00 -708.00

Cost of Disassembly 190.00 0.00 190.00 -6.66 183.34

4962.67 0.00 4962.67 0.00 4962.67

Summary Amount Debit Credit

Inventory A/c for Finished Kit 2115 821.33 821.33

Finished Goods 2120 0.00

Finished Goods (Interim) 2121 0.00

Inv A/c for Kit Comp 2125 3918.00 3918.00

Inv A/c for Kit Comp Interim 2126 0.00

Raw Materials 2130 0.00

Raw Materials (Interim) 2131 0.00

WIP Account, Finished goods 2140 -260.00 260.00

Customers Domestic 2310 1000.00 1000.00

Vendors, Domestic 5410 -5454.00 5454.00

Inv. Adjmt. (Interim), Raw Mat 5530 0.00

Sales, Retail - Dom. 6110 -1000.00 1000.00

Purch., Retail - Dom. 7110 434.00 434.00

Inventory Adjmt., Retail 7170 701.34 701.34

Cost of Retail Sold 7190 821.33 821.33

Purch., Raw Materials - Dom. 7210 5020.00 5020.00

Inventory Adjmt., Raw Mat. 7270 -668.00 668.00

Direct Cost Applied, Raw mat. 7291 -5020.00 5020.00

Cost of Disassembly 7500 190.00 190.00

Direct Cost Applied, Cap. 7791 -504.00 504.00

0.00 12906.00 12906.00

25


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