Products in Profit Margin Departments are generally items such as hardware or miscellaneous parts. They are items that have an inventory value, but when counting inventory, each item may not necessarily be counted. An example of this would be a department with nuts and bolts. Each and every bolt wouldn’t be counted for inventory, yet an inventory value would be assigned to the bolt product based on the Profit Margin entered. When a Profit Margin Department is set up, each product has an assigned Profit Margin. Purchasing in this product is done by entering an A/P Bill instead of a Purchase Invoice and posting that A/P Bill to the inventory asset account.
