Inventory Exercise: Use standard cost as default price on item Orders and Purchases

Transcription

1 Inventory The Inventory command centre allows you to; Maintain a stock control system Set-up items of stock Make inventory adjustments Set or adjust inventory prices Enter actual stocktake quantities. We will perform the following; Set-up 4 items, being 3 different flood lights and a switch. Place a Purchase Order with our supplier for these items Record the bill for the items Sell some to our customer Review some reports and item information. Exercise: Go to Setup on the Menu Bar and select the Preferences. Click the Inventory tab, tick Use standard cost as default price on item Orders and Purchases Exercise: Go to Inventory command and select; Items List. Click on the New button at the bottom of the window. Setup an item for Flood Light 2000watt use FL2 as the code. Setup the linked Accounts for; Cost of Sales Materials Sales Parts Inventory Note: 1. If an item has nil quantity than it cannot be invoiced ie MYOB will not allow negative quantities to be created in inventory. 1. Once an item is setup an inventory item and a transaction is recorded it cannot be unselected.

2 Item Details; Link a Picture to the file, if you have a photo of the item it can be attached to the card file. Description can be used for those items with a long description of up to 255 characters long. Custom Lists allow you to create 3 lists that can be used to sort and group the inventory items for reporting purposes. These are fixed features and can be used to record information about an item which you may want to be able to run reports based on this. For example: Colour, Type and Location. Then you could report on blue trailers at the Newcastle branch location. Custom Fields allow you to record variable information about an item. Eg serial number, warranty, manufacturer. This information can be input in the invoicing or purchases command centers so they are printed on the invoice or bill. Item Buying Details The Last Purchase price is entered / undated via Purchases. The Standard Cost will be the cost used as the Purchase Order cost. Note: The Standard cost includes GST. In the Buying Unit of Measure field, enter the item's buying unit of measure, that is, the method by which this item is packaged when you purchase it. Some typical units of measure are Each, Pair, Case. In the Number of Items per Buying Unit field, enter the number of items that make up one buying unit, that is, the number of items that will be added to your inventory each time you purchase one of these items. The number you enter depends on how you sell the inventory. While in many cases the number you enter will be 1. However, if you purchase lamps in cartons of 10 and you sell lamps individually you'll enter 10. That way the inventory count will increase by 10 individual lamps each time you purchase one carton of lamps. Exercise: Enter the Standard cost of $110 (this is inclusive of GST), both Unit of Measure & No. of items per buying unit = 1 Enter the Optional Restocking Information- eg supplier details and reorder points, as below.

3 Item Selling Details The base selling price can be either inclusive of GST or exclusive of GST depending on whether the Inclusive / Exclusive box is ticked. This is an important consideration when deciding to use items. Exercise : Base Selling price = $150 Both Unit of Measure & No. of items per selling unit = 1 For our exercise leave it un-ticked, ie the selling price shown is excluding GST. Click OK to save the item. Exercise: Create the following new item; Code: FL3 Description: Flood Light 3000 watt Buying Details; Selling Details; Click OK to save the item.

4 Exercise: Create the following new item; Code: FL4 Description: Flood Light 4000 watt Buying Details; Selling Details; Click OK to save the item

5 Exercise: Create the following new item; Code: SW1 Description: Switch - Outdoor Buying Details; Selling Details; Click OK to save the item.

6 Purchase Order for stock Items Exercise: Go to Purchase Command / Enter Purchases Enter an Order for Hi Wire dated 2/10/13 (Change screen Layout to Item). Enter the following items & quantities to order; 10 * FL2, 10 * FL3, 10 * FL4 and 40 * SW1 You can , Fax or Print the Purchase Order to send it to the Supplier. Convert to a Bill A week later the items are received along with the Suppliers invoice. Exercise: Go to the Purchases Register and select the Orders tab section. The first order will be highlighted, so click on the Change to Bill button at the bottom of the screen. The invoice date is 8/10/13 Invoice No All items ordered have been received. The cost of each item will be the same as the Standard Cost. Note: That if the invoice cost is different to the standard cost than the invoice cost will be entered into the Price column.

7 Lets now sell some of these items to a Customer - Enter a Sale Exercise: Go to Sales / Enter Sales Select Hunter Coal as your customer. Change the screen Layout to an Item. Invoice date will be 15/10/13 and Customer PO # will be 120 Quantity Sold will be; 10 * FL2, 10 * FL3, 5* FL4 and 20* SW1 Now go to the Inventory / Items List note the inventory quantity and cost price. Also open each item to view the: - Item Profile and note the inventory information, - Buying Details and note the Last Purchase price - History View the transaction Journal for sales dated 1/10/13 to 31/10/13 Note: not only is the sale entered but also the cost of the items sold is calculated and entered as part of the Journal.

8 Profit and Loss Report for October Go to Reports and select Account type reports. Select the Profit & Loss accrual click on Customise button at the bottom of the screen. Select the Month of October. Select the correct financial year. This displays the Sales value for the items sold and also the purchase cost of those items sold. Sales and profitability analysis; What is our Budget Gross Profit Percentage and what did we achieve? 1. What was our Budgeted Gross profit percentage? All of our items had the same mark-up; of 50% of cost. That is, if cost =$100 ex GST, than selling price = $150 ex GST, and Profit is $50 Gross profit percentage is than; Ie. $50 $150 X 100 = 33.3% Profit $ Selling price $ X Actual Gross Profit percentage achieved equals; Gross Profit $ $3,500 x 100=???? Sales $10,500 The difference is due to either; 1. Our actual purchase price being different from the Standard cost or expected purchase price. 2. Our actual selling price being different from the expected selling price.