# Profit and Loss Per Kit Component

Order payment is split between components of a single kit to determine its profit and loss. The payment is applied based on the component cost ratio. This means that payment will be split not evenly, but rather applied in proportionally to the cost of each component. The applied payment will the be calculated against the orders costs to determine the P&L.

The calculation is 2 step as follows:
1. KitComponentCostFactor =  (CostOfKitComponent  / KitParentUnitCost)
2. Payment per unit =  ((OrderPayment * KitComponentCostFactor) * ComponentQty) / OrderQty
Please Note: These reports calculate the P&L of refunds etc to the ship date. To see P&L based on when the payment or refund occurred, use  the Transaction Reports.

Example 1:
Total payment on Order = \$100.00
Order Qty = 2
KitParentUnitCost = \$25.00
_______________________________________________
KitComponent 1: COMPONENT2TEST
Component Qty: 1 (in the kit configuration, not the component qty on the order)
CostOfKitComponent – \$5.00
KitComponentCostFactor = (CostOfKitComponent  / KitParentUnitCost)
0.2 = 5 / 25
Payment per unit =  ((OrderPayment * KitComponentCostFactor) * ComponentQty) / OrderQty
\$10 = ((100 * 0.2) * 1) / 2
______________________________________________

KitComponent 2: COMPONENT1TEST

Component Qty: (in the kit configuration, not the component qty on the order)
CostOfKitComponent – \$10.00

KitComponentCostFactor = (CostOfKitComponent  / KitParentUnitCost)
0.4 = 10 / 25
Payment per unit =  ((OrderPayment * KitComponentCostFactor) * ComponentQty) / OrderQty
\$40 = ((100 * 0.4) * 2) / 2

When there are multiple items on the order the costs are first similarly divided between those items at the parent level, and then broken down at the component level as above.