Material Cost Type Cheatsheet

• Can be either an inventory or assembly item
• Is sold to customers
• Has MSRPs and customer pricing
• Can have customer exclusivity restrictions

Inventory or Purchased Assembly (PA) Finished Good

• Preferred vendor, vendor quotes, and purchase contracts set up.
• Freight and duty applied to item.
• PA – “use planned PO cost” box is checked, and “planned PO cost” is filled in.
• Purchase orders (PO) cut for items.

True Assembly (TA) Finished Good

• Work orders (WO) are created to make items.
• Can have labor/overhead in BOM
• No freight and duty

• Can be either an inventory or assembly item (assembly item is known as a sub-assembly)
• Is not sold to customers
• Can have customer exclusivity restrictions (currently not utilizing now)
• Is tied to a BOM

Inventory or Purchased Assembly (PA) Raw Material

• Preferred vendor, vendor quotes, and purchase contracts set up.
• Freight and duty applied to item.
• PA – “use planned PO cost” box is checked, and “planned PO cost” is filled in.
• Purchase orders (PO) cut for items.

True Assembly (TA) Raw Material

• Work orders (WO) are created to make items.
• Can have labor/overhead in BOM
• No freight and duty

• Is typically an inventory item
• Is not sold to customers
• No customer exclusivity restrictions
• Is not tied to a BOM
• Preferred vendor, vendor quotes, and purchase contracts set up.
• Freight and duty applied to item if applicable.
• Purchase orders (PO) cut for items.

• Is typically an assembly item
• Is not sold to customers
• Can have customer exclusivity restrictions (currently not utilizing now)
• Is tied to a BOM

True Assembly (TA) WIP

• Work orders (WO) are created to make items.
• Can have labor/overhead in BOM
• No freight and duty