Assembly Build

Assembly Build is the transaction that actually transforms components into the finished assembly.

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Build Overview

ASSEMBLY BUILD PROCESS
─────────────────────────────────────────────────────────────────

Components                              Assembly
    │                                      ▲
    ▼                                      │
┌──────────┐                          ┌──────────┐
│ Part-A   │ ─┐                       │ Finished │
│ Part-B   │ ─┼───▶ [BUILD] ─────────▶│ Assembly │
│ Part-C   │ ─┘                       │          │
└──────────┘                          └──────────┘
    ↓ Qty                                 ↑ Qty
 Decreases                             Increases

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Standard Assembly Build

What Happens

Action	Result
Create from WO	Build transaction linked to Work Order
Confirm quantities	Components consumed
Set build location	Where assembly is stored
Save build	Inventory transformed

Creating Assembly Build

ASSEMBLY BUILD FROM WORK ORDER
─────────────────────────────────────────────────────────────────

Work Order #WO-001 (Build 10 assemblies)
         │
         ▼
Assembly Build #AB-001
├── Assembly: Widget-Assembly (qty: 10)
├── Components Consumed:
│   ├── Part-A: 20 units (2 per × 10)
│   ├── Part-B: 10 units (1 per × 10)
│   └── Part-C: 30 units (3 per × 10)
└── Location: Main Warehouse

Result:
  - Components reduced
  - Assembly increased by 10
  - Work Order updated

GL Impact

Account	Debit	Credit	Why?
Assembly Inventory	$500		Finished goods added (Asset ↑)
Component Inventory (Part-A)		$200	Parts consumed (Asset ↓)
Component Inventory (Part-B)		$150	Parts consumed (Asset ↓)
Component Inventory (Part-C)		$150	Parts consumed (Asset ↓)

ASSEMBLY BUILD GL EXPLAINED
─────────────────────────────────────────────────────────────────

What happened: Components transformed into finished assembly

Assembly Inventory    $500  Dr
  └── Finished goods now exist = Asset INCREASES

Part-A Inventory           $200  Cr
  └── 20 units used up = Asset DECREASES

Part-B Inventory           $150  Cr
  └── 10 units used up = Asset DECREASES

Part-C Inventory           $150  Cr
  └── 30 units used up = Asset DECREASES

Total: Debits = Credits ($500 = $500)
       Inventory value unchanged, just transformed

Inventory Impact

INVENTORY AFTER ASSEMBLY BUILD
─────────────────────────────────────────────────────────────────

Components (BEFORE):
┌─────────────────────────────────────────┐
│ Part-A: On Hand: 100, Committed: 20     │
│ Part-B: On Hand:  50, Committed: 10     │
│ Part-C: On Hand: 150, Committed: 30     │
└─────────────────────────────────────────┘

Components (AFTER):
┌─────────────────────────────────────────┐
│ Part-A: On Hand:  80, Committed: 0      │
│ Part-B: On Hand:  40, Committed: 0      │
│ Part-C: On Hand: 120, Committed: 0      │
└─────────────────────────────────────────┘

Assembly (BEFORE):
┌─────────────────────────────────────────┐
│ Widget-Assembly: On Hand: 0             │
└─────────────────────────────────────────┘

Assembly (AFTER):
┌─────────────────────────────────────────┐
│ Widget-Assembly: On Hand: 10            │
└─────────────────────────────────────────┘

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Partial Builds

Build only part of the Work Order quantity:

PARTIAL BUILD SCENARIO
─────────────────────────────────────────────────────────────────

Work Order #WO-001: Build 100 assemblies
    │
    ├── Build #1: 40 assemblies
    │   └── WO Status: In Process (40/100)
    │
    ├── Build #2: 35 assemblies
    │   └── WO Status: In Process (75/100)
    │
    └── Build #3: 25 assemblies
        └── WO Status: Built (100/100)

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WIP (Work-In-Progress) Tracking

For more complex manufacturing, track components separately:

Component Issue

Move components from inventory to WIP:

WORK ORDER ISSUE
─────────────────────────────────────────────────────────────────

Work Order #WO-001
         │
         ▼
Work Order Issue #WOI-001
├── Part-A: 20 units issued to WIP
├── Part-B: 10 units issued to WIP
└── Part-C: 30 units issued to WIP

Result:
  - Component inventory decreases
  - WIP inventory increases

GL Impact (Issue):

Account	Debit	Credit	Why?
WIP Inventory	$500		Components in production (Asset ↑)
Component Inventory		$500	Parts moved to WIP (Asset ↓)

Work Order Completion

Move from WIP to finished assembly:

WORK ORDER COMPLETION
─────────────────────────────────────────────────────────────────

Work Order #WO-001
         │
         ▼
Work Order Completion #WOC-001
├── Assembly: Widget-Assembly (qty: 10)
└── Completed from WIP

Result:
  - WIP inventory decreases
  - Assembly inventory increases

GL Impact (Completion):

Account	Debit	Credit	Why?
Assembly Inventory	$500		Finished goods added (Asset ↑)
WIP Inventory		$500	Production complete (Asset ↓)

Complete WIP Flow

WIP TRACKING FLOW
─────────────────────────────────────────────────────────────────

Components          WIP             Assembly
    │                │                  ▲
    ▼                ▼                  │
┌──────────┐    ┌──────────┐      ┌──────────┐
│ Raw      │    │ Work in  │      │ Finished │
│ Materials│ ──▶│ Progress │ ────▶│ Goods    │
└──────────┘    └──────────┘      └──────────┘
     │              │                  │
   Issue        In Process         Completion

GL Flow:
  Issue:     WIP ↑, Components ↓
  Complete:  Assembly ↑, WIP ↓

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Work Order Close

Finalize the work order and capture variances:

What Happens

Action	Result
Close WO	Finalizes production
Calculate variances	Differences captured
Post variance GL	Variance accounts debited/credited
Release uncommitted	Remaining commitments released

Variance Types

Variance	Cause
Material Variance	Used more/less components than standard
Labor Variance	More/less labor than planned
Overhead Variance	Overhead different than allocated
Scrap Variance	Material scrapped during production

GL Impact (Close with Variance)

WORK ORDER CLOSE WITH VARIANCE
─────────────────────────────────────────────────────────────────

Standard Cost:  $500 per assembly
Actual Cost:    $520 per assembly (used extra Part-A)

Variance: $20 unfavorable

Close Entry:
  Material Variance    $20  Dr  ← Cost overrun (Expense ↑)
  WIP Inventory             $20  Cr  ← Clear remaining WIP

OR if favorable:
  WIP Inventory        $20  Dr  ← Clear remaining WIP
  Material Variance         $20  Cr  ← Cost saving (Expense ↓)

---

Assembly Unbuild

Reverse an assembly - disassemble back to components:

ASSEMBLY UNBUILD
─────────────────────────────────────────────────────────────────

Assembly:
  Widget-Assembly: 10 units ──▶ 0 units

Components:
  Part-A:  80 units ──▶ 100 units (returned)
  Part-B:  40 units ──▶  50 units (returned)
  Part-C: 120 units ──▶ 150 units (returned)

Use Case:
  - Defective assembly needs rework
  - Parts needed for other orders
  - Incorrect build needs reversal

GL Impact (Unbuild):

Account	Debit	Credit	Why?
Component Inventory	$500		Parts returned to stock (Asset ↑)
Assembly Inventory		$500	Assembly removed (Asset ↓)

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Quick Reference

Build Transactions

Transaction	Components	WIP	Assembly
Assembly Build	↓	—	↑
Work Order Issue	↓	↑	—
Work Order Completion	—	↓	↑
Assembly Unbuild	↑	—	↓

Common Scenarios

Scenario	Path
Simple build	WO → Assembly Build
Tracked production	WO → Issue → Completion → Close
Partial completion	Multiple builds against one WO
Defective build	Unbuild, then rebuild

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Next Steps

• Work Orders - Work order creation
• Outsourced Manufacturing - Vendor manufacturing