Work in Progress
There are a lot of variations for dealing with work in progress and there is no way cover all kinds. One common scenarios is that you order raw material of some kind and you send it to someone else to make what you sell. So the cost of what you sell is the combination of the cost of the raw material and the bill from the other company who turned your raw material into a product.
I buy the raw material as an inventory item. Then when I have to ship it out to a business to be turned into something salable, I use inventory adjust to move the raw material I am sending out to an other current asset account I set up called WIP. That adjustment takes the raw material out of inventory and holds that value in the WIP account.
When I get the bill for making something from my raw material, I receive the inventory just as you would normally. That gives the item a cost.
Then look at the WIP account and write down the balance.
Then use inventory adjust, set the adjusting account to the WIP account, and mark the adjustment as a value adjustment. Find the item in the list, and add the amount from the WIP account to the total value of the item. DO NOT change the number of items on hand.
When you click save the value of the raw material that was in the WIP account will be added to the value of the items that were made and a new cost per item will be calculated. The WIP account will have a zero balance.
You can use variations of this process to cover just about any process where more than one transaction is involved in determining cost.
Answering a question on the QB forum led me to another way to accomplish the same thing.Create an other asset account called something like WIP, and then create a non-inventory item called something like “WIP-purchases” and point it to the WIP asset account. When you buy things use this item, and in the description block enter what it is you bought. As soon as the transaction is saved the cost of the “WIP-purchases” item is sent to the WIP asset account since the cost of all non-inventory items (even if they are marked for resale) are posted to the account they point to.
