Tag: What is ‘Cost of Goods Sold’
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How are Cost of Goods Sold in Retail Determined?
Each industry is different in determining costs of goods sold or cost of services rendered. Retail uses two distinct methods to calculate costs of goods sold. The first is called ‘Specific Identification’ whereby each item sold is specifically identified to its recorded cost. The second method is referred to as ‘Inventory Adjustment’ format. In this method,…
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Percentage of Completion Method for Accounting in Construction
In construction accounting, the percentage of completion method is the preferred tool to account for revenues and direct costs of construction. If you are an owner of a contracting business, this is the best method of accounting.
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Small Business Model Series Entry #6 – Number Crunching Time
While I wait on family and friends to send me information on the location of ATM’s, I decided it is time to do some preliminary number crunching. My initial introduction to this illustrated a very good return. I’m really interested in determining if I can make some real money or will this be nothing more than…
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What is ‘Cost of Goods Sold’?
Simply put, ‘cost of goods sold’ equals the direct costs of materials, human resources, and equipment needed to produce the item sold. However, this can be confusing because there are many marginal cost items that affect the real cost of producing and selling the item.
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What is the Difference between Markup and Margin?
It is amazing how one simple formula can be so confusing to the average business owner. The formula is markup. It is defined as the dollar amount or percentage of the cost of the item added to the item to equal its sales price.