Cost of Sales Formula?

by Fahad

What is the cost of sales formula?

The cost of sales formula is:

cost of sales formula

Please see the lesson on Sales, Cost of Goods Sold and Gross Profit for more information and explanations on this topic.

Michael Celender

Comments for Cost of Sales Formula?

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Cost of Sales
by: Anonymous

How to compute Cost of Sales if my sales is 141,000 and Purchases 55,000?

by: Anonymous

Levin Furniture buys a living room set with a $4,000 list price and a 55% trade discount. Freight (Freight on Board shipping point) of $50 is not part of the list price. What is the delivered price (including freight) of the living room set, assuming a cash discount of 2/10, n/30, ROG? The invoice had an April 8 date. Levin received the goods on April 19 and paid the invoice on April 25.

Formula for Cost of Sales
by: Anonymous

To calculate the cost of sales :
Sales x 100/100 + markup %
eg. 500 x 100/160
500 : sales
160 : 100 + mark up %. markup % is 60%

Cost of Sales & Mark-Up Calculation
by: Colin

I was given the sale amount and was asked to calculate the cost of sales if all goods were marked up by 60%. Sale amount was 24,400....

Mark-up is the increase based on cost of goods so answer is:

24,400 X 100/160 = 15,250

Sales is 160 here as cost + mark-up = sales (100 + 60 = 160)

Cost is 100 as mark-up is based on cost so cost is the subject of our equation, meaning the 100% portion of the equation. Or to put it another way, the 60% mark-up is based on 100% cost - mark-up is 60/100 of the cost.

Michael Celender

Cost of sale
by: Azima

I confuse about this please help.

Bora was grateful for the balance sheets that his friend prepared. In going over the numbers, he remarked, "it's sort of surprising that cash increased by 31,677USD, but net income was only 19,635USD, why was that?"

His friend replied,"A partial to that question is to look at an income statement for june. I think I can find the data I need prepare one for you."

In addition to the data given in the case, his friend found a record of cash receipts and disbursements, which is summarized in Ex1. He also learned that all A/P were to vendors for purchase of merchandise inventory and that cost of sale was 39,345USD, in June.
Cash receipts and Disbursements month of June

Cash receipts
Cash sale $44,420
Credit Customer 21,798
Bora 11,700
Bank Loan 20,865

Total Receipt 98,783$

Cash disbursements
Equipment Purchase $23,400
Other Asset Purcahse 408
Payment on A/P 8,517
Cash purchase of Merchandise 14,715
Cash purchase of Supplies 1,671
Dividend 11,700
Wages Paid 5,660
Utilities Paid 900
Miscellaneous payment 135
Total $67,106

Cash Bal, June 1 $34,983
Receipts 98,783
Sub total 133,766
Disbursement 67,106
Cash Bal, June 30 $66,660

1. Prepare all income statement for june in proper format. explain the derivation of each item on this statement, including cost of sales.
2. Explain why the change in the cash balance was greater than the net income.
3. Explain why the following amount are incorrect cost of sale amount for june: a.$14,715 and b.$36,030. Under what circumstances would thes amount be correct cost of sale amounts?

How to calculate the cost of sale
by: Anonymous

If you were given just cost of sales, how do we calculate the cost of sale?

Journal Exercise
by: Mthandeni

Hi please help by journalising the following:

1. The business thus went ahead in obtaining a loan of R150,000. Interest of 11% for the year is still owing at year end.

2. A business purchased stock to the value of R12,000, R10,000 of which was sold. The business sold this stock for R25,000. The business uses the perpetual stock system. The cost of sales entry was not recorded in the business records in the month the stock was sold.

3. Stock purchased for R30,000 was recorded against the`purchases' account, and valued at R25,000 in closing stock at year-end. The difference of R5,000 was taken to the 'stock written down' account. However, upon discussion between managers it was agreed that the treatment of this valuation was not the same as the method of valuation used the prior year, and the difference had to be reversed.

Cost of Sales Formula
by: Anonymous

Cost of Sales = Opening Inventory + Purchases -Closing Inventory

Cost of Sales and Gross Profit
by: Anonymous

Please help with calculating cost of sales and gross profit:

Inventory (1 March 2013) - 100,000
sales - 150,000
purchases - 80,000
sales returns - 1,200
purchases returns - 2000,
freight charges on purchases - 650
freight charges on sales - 1700
settlement discount granted - 350
closing inventory - 400,000

What is the cost of sales figure and gross profit?

Cost of Sales and Gross Profit Exercise
by: Anonymous

I'm confused by this please help:

Inventory (1 march 2013) 150 000
sales 100 000
purchases 80 000
sales returns 1500
purchases returns 2000
Freight charges on purchases 650
Freight charges on sales 1700
Settlement discount granted 350

Please help, which should I consider when calculating cost of sales and gross profit.

by: Anonymous

Hi I want to ask about the following:

Inventory(1 March20.2) - 170000
purchases -350000
sales returns -1200
purchases returns - 2000
closing inventory -160500

What is the cost of sales figure?

by: waqas

CGS = opening inv + purchases - closing inv

Cost of sales formula
by: Patrick

Purchases X
Add closing stock(inventory) X

Less opening inventory(stock) (X)

Cost of sales X

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