Cost Of Goods Sold
Beginning Merchandise Inventory = $150,000
Net Purchases of Merchandise = $400,000
Ending Merchandise Inventory = $125,000
COGS = 150,000 + 400,000 - 125,000 = $425,000.
In standard accounting practices, gross margin can be calculated by subtracting the cost of goods sold from total sales.
Use Cost Of Goods Sold in a sentence
“ My boss asked me to take the amount of money we spent on raw materials and production of our product to calculate our overall cost of goods sold. ”
“ I had to determine the cost of goods sold, which could take a pretty long time and a lot of stressful work. ”
“ You need to make sure that you are getting the most out of your cost of goods sold at all times to increase profits. ”