Manufacturing
Outsourced Manufacturing (Contract Manufacturer)
Recording the cost when an external factory (CMO) produces the product for you.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Finished Goods Inventory | Asset (+) | 8,000.00 | - |
| Raw Materials Inventory (at CM) | Asset (-) | - | 5,000.00 |
| Contract Manufacturing Expense | Expense (+) | - | 3,000.00 |
💡 Accountant's Note
Even if you don't make it, you own the materials. When the external factory finishes, you convert your raw materials plus their service fee into Finished Goods.
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