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Including labour in inventory item cost

AccountRight Premier and Plus, Australia only

In manufacturing, labour costs associated with the production of an item are usually included in the cost of the finished goods. For example, if you own a car repair shop and and an employee spends 30 hours repairing a car, you'll want to transfer that labour value onto the cost of the finished, saleable car.

You can do this in AccountRight by allocating employee labour costs to a "labour" inventory item, then transferring that value to your finished goods.

Let's take you through the details.

Before you begin

There's a few things you need to set up before transferring labour costs to your item.

 

Transferring payroll expenses to the value of finished goods

After completing the above setup, you're ready to track labour costs for inclusion in your finished goods. This is done by specifying labour costs on an employee's pay, then transferring this value to the finished goods.

Let's walk you through the process.