Freight-in cost - adding to CGS

[markf]

Our company manufactures 4 different products in Asia and ships in containers of product using a freight forwarder. How can we include the cost of freight in our product cost?

A method I was told by our CPA was to increase the unit cost on the "Bill" screen so it includes freight cost. This doesn't work because it increases the payable due the part manufacturer and double counts the freight paid to the forwarder.

This is pretty basic stuff but I'm not an accountant.

Thanks for any ideas and help.

[gibbo]

Not a silly question. The reality is that this is not how QuickBooks expects you to work. With QuickBooks, you have a cost price for every item. If you want this to include the freight component, then instead of entering the freight as a separate component, you have to include a small bit of it on each item as you bring them in. This may or may not be easy to do. Any small bit that doesn't fit into the items could be just added as freight. eg you may add (say) 5c to every item and then have a few dollars over as freight.

[markf]

Thank you - you are the only response to this question.

[kgd]

When we purchase 50 items for $5.00, we can also get the same item if we buy 100 items for $3.00, in the item list would I just set up sub accounts for the different prices?
Thanks

[gibbo]

If these are the same item, but simply different costs, you use the same item. What QuickBooks does is average the cost over all the items in stock. So your average cost will be more than $3 but less than $5 depending on how many at each cost are in stock. While this sometimes seems confusing, it is actually a correct way to do it.

[kgd]

Originally posted by kgd
When we purchase 50 items for $5.00, we can also get the same item if we buy 100 items for $3.00, in the item list would I just set up sub accounts for the different prices?
Thanks
Thank you

[Specialties Inc]

I created an INBOUND FREIGHT account which is a sub-account of COGS. Freight bills go in there.....

Furthermore, on an excel sheet I calculate the landed cost, which includes 'first cost', 'INBOUND FREIGHT', 'local freight', 'duties' etc. etc. but excludes VAT (Value Added Tax). Don't know what stipulations you have in regards to State Tax on imports. The customs broker's fee should also go on that sheet but they are notoriously late with their billing so I enter their bill to account CUSTOMS BROKER type EXPENSE ACCOUNT.

Anyway, I prorate the total landed cost of items received and enter them ITEM>ACTIVITIES>Adjust Quantity/Value on hand. Select for Adjustment Account: COGS

I am not an accountant either but this works perfectly well for my business.

If you want a copy of the excel sheet, send a message to specialties(at)caribsurf(dot)com. Change the (at) and the (dot). I am trying to avoid bots retrieving my address from forum. Don't need more junkmail.

Norbert

[Manh]

I am in the same situation i.e. our manufacturers are in China and we import products from them plus freight in. Send me an email at manhquyus(at)yahoo(dot)com and I will show you my solution which works perfectly for my company.

Cheers,