Cost of sales = Production expenses + Selling expenses.
There are options for a more how to add taiwan number on whatsapp accurate calculation of the coefficient taking into account unsold products:
Cost of sales = Production expenses + Commercial expenses + (Balance of unsold products at the beginning of the reporting period - Balance at the end of the reporting period).
If the company specializes in construction, then work in progress serves as a clarifying parameter.
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Methods of Cost of Sales Analysis
After calculating the numerical values of the coefficients, an analysis of the cost of sales is carried out. The following methods are the most popular.
Custom method
This type of analytics allows you to determine the costs for each production order. It is not possible to forecast the cost of sales with its help. The value can only be established after signing a contract with the client.
The preliminary value of the cost of sales indicator when posting in the reporting accounting documentation (if such a need arises) is entered by analogy with a similar product that was produced earlier.
The order method is applicable to companies specializing in the production of original or complex products with a long and multi-stage technological process (for example, automotive equipment, aerospace products). As a rule, the batches of goods are small in number, and their composition is determined by the terms of the contract.
Methods of Cost of Sales Analysis
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To find out the cost price of a unit of production, it is necessary to divide the total production costs by the number of manufactured products in accordance with the contract. This calculation method is based on the accounting of expenses for a specific order, and not for the billing period.
Cost of sales of one product = Cost of a specific order / Number of products produced.
To calculate sales revenue using the order-based method of determining cost price, it is necessary to keep track of all factors affecting production during the manufacturing of products. This is a very long and labor-intensive process, so not every businessman practices it. Let us explain in more detail.
The furniture company OOO Angstrem, known to us from the previous example, manufactured 15 computer desks and 12 chairs in a month. Direct production costs for each type of product amounted to 55 and 65 thousand rubles, respectively. For the same period, the amount of general business expenses was determined to be 22 thousand rubles.
Let's calculate the cost of sales of the goods (line 2120 in the balance sheet of accounting). To do this, we will distribute general business costs proportionally to the amount of direct costs. Consequently, the value of the indicator attributed to the cost of sales of tables will be determined by the formula:
22,000 * (55,000 / (55,000 + 65,000)) = 10,670 rubles.
And on the chairs:
22,000 * (65,000 / (55,000 + 65,000)) = 11,924 rubles.
Now we can calculate the cost of the material and technical values required to manufacture one table and chair. First, we will determine the cost price of sales of a specific batch of furniture to the number of units produced.
Cost price of one table:
(55,000 + 10,670) / 15 = 4,378 rubles.
Cost price of one chair:
(65,000 + 11,924) / 12 = 6,410 rubles.
Distribution of all expenses should be done in accordance with the number of manufactured and sold products (in our case, tables and chairs). Then the total volume of indirect costs is calculated using the formula: