Q: We have assemblies that sometimes require replacement of a component or two. Should we create a credit note for the whole assembly in this case?
A: You will need to process a credit note for the amount of the returned component. If you are going to return the stocks to inventory, you should also process a stock adjustment. For the replacement, you can convert the sale to an Advanced Sale so you can process another fulfilment.
Q: We had set up a Bill of Materials (BOM) for one of our products under the Inventory module, but when we created a new Assembly, the BOM was different from the one we'd set up. Why is this happening?
A: This happens when the product in the BOM you created also has a BOM with an auto-assembly setting. When you try to assemble the new BOM, the product will replace the new BOM with the other BOM. This is how hierarchical BOMs work in DEAR.
Q: If my assembly has a sub-assembly, how will it look like on the Finished Goods screen?
A: All products with BOMs and set to auto-assemble are represented by components in Finished Goods tasks. All products with BOMs and Auto-assembly switched off are shown as any other product. Only FIFO, FIFO - Batch and Special - Batch costing methods support the Auto-assembly feature.
Q: We use a contract manufacturer to assemble a completed product from the raw materials (cane sugar, citric acid, lime juice, bottles and labels) I provide them with. The contract packer takes the ingredients and bottles them into a beverage. They charge a base fee + a fee per completed unit. How can I include (capitalise) this fee in production?
A: In this case, you can do the following:
- Create an expense account in your Chart of Accounts, e.g. Work in Progress.
- For the raw materials, use the Issue to Production module and write off raw materials to the Work in Progress account, e.g. total cost of raw materials = $10K.
- Contractor flat fee and fee per completed unit: Upon receiving an invoice and goods from a contract packer, process them as usual with a purchase invoice. Add a manual journal, debiting Inventory and crediting Work in Progress for the amount of $10K, which will then be distributed across the finished products.