Cogs (1 Viewer)

[grassrecords]

how the hell does this work

 

[Kulazzi]

COGS = Opening Stock + purchases - Closing Stock

Opening Stock

This is the value of inventory (stock) that the business has at the start of the financial yr. (i.e. 1st July)

Closing Stock

This is the value of stock on hand at the end of the financial yr (i.e. 30th June)

Example

Opening Stock (stock at start of period) ----> $2 500
Purchases (during the period) ----------------> $ 10 250
Closing Stock (stock at the end of period) ---> $3 400

therefore:

C.O.G.S = $2 500 + $10 250 - $3 400
= $9 350

Hope that helped

 

[grassrecords]

Purchases (during the period) ----------------> $ 10 250

is that how much they bought or how much they sold ?

 

[Kulazzi]

how much they bought, not sold cos they're purchasing stuff which means they're buying stuff

 

[grassrecords]

so they sold $9 350 ?

 

[Kulazzi]

yup, i guess thats what it basically means

 

[grassrecords]

ok cool thanks