Hi KEMLTD: The additional costs in a BOM are credited to the Assembly Cost Clearing. Therefore, by using a Labour expense account shouldn't be used. The way I have set this up for clients is to use the Assembly Cost Clearing account as an account where the total capitalized cost of an assembled item will be accumulated. You can either use this account as an 'offset' in COGS, or you can reallocate the credit balance to various cost accounts, including labour costs. The end result will be that the cost accounts (or COGS section of the income statement) will be reduced, and then when the item is sold, the total cost of the item will be charged to your COGS account.

Hope this helps.

Regards,
Lars Glimhagen