Establishing cost basis for parts in inventory (USA taxes)

BonfireBricks

Hi Everyone,

I'm curious how you establish your cost basis for the parts in inventory. For example, do you just take the cost of the set divided by the number of parts? Do you establish higher values for minifigures or motors?

How do you track the rolling inventory value?

If anyone has any suggestions, I'd love to learn what you do and what you consider the pros & cons of your accounting system for parts.

Thanks!

tons_of_bricks

Well, for our used pieces, which we buy in large bulks, we figure out an average cost per pound for us. Then, instead of figuring out the cost of each piece (which would take forever), we simply figure out the cost per order. So if we pay Y per pound of Lego, and the order weighs 2 pounds, then we figure we paid 2Y for that order.

Calibrick

We use the cost per pound also... it's really the only way I've found that saves your sanity. :-) I use a custom Excel workbook and use a tailored accounting method (acceptable by the IRS) as a weighted average My Cost, as I didn't want to deal with first in/first out, etc. Feel free to email me at [email protected] if you'd like a stripped copy of my workbook to play with and if you have Microsoft Excel. :-) I may not see your email until the weekend, heads-up...