Which of the listed enterprise expenses should be classified as COGS?
Posted: Sun Jan 19, 2025 3:55 am
Example of cost accounting in COGS.
For example, for the production of hosiery, yarn was purchased that was used on the company's long-standing machines. Each pair of hosiery is packed in film, a cardboard insert is put into the packaging, and full-color paper packaging is used.
The products are manufactured in the maldives company email list workshop, the company pays utility bills monthly (on days when the machines are not working, the workshop continues to perform other tasks), and a cleaning lady washes the floor in the workshop every day.
The COGS will definitely include expenses for yarn, packaging (all the listed types), but the salary of the cleaner, utility costs and depreciation of the machines will not be taken into account in the COGS, since the company bears these expenses even in cases where it does not produce hosiery.
How to record COGS when calculating unit economics?
COGS can be taken into account in unit economics both as a percentage of the product price or average bill, and in absolute values (in rubles).
If the retail price of the product sold differs depending on the distribution channel, it is advisable to calculate COGS in money (since using a percentage you can get incorrect data with different selling prices).
I wish you successful marketing activities!
For example, for the production of hosiery, yarn was purchased that was used on the company's long-standing machines. Each pair of hosiery is packed in film, a cardboard insert is put into the packaging, and full-color paper packaging is used.
The products are manufactured in the maldives company email list workshop, the company pays utility bills monthly (on days when the machines are not working, the workshop continues to perform other tasks), and a cleaning lady washes the floor in the workshop every day.
The COGS will definitely include expenses for yarn, packaging (all the listed types), but the salary of the cleaner, utility costs and depreciation of the machines will not be taken into account in the COGS, since the company bears these expenses even in cases where it does not produce hosiery.
How to record COGS when calculating unit economics?
COGS can be taken into account in unit economics both as a percentage of the product price or average bill, and in absolute values (in rubles).
If the retail price of the product sold differs depending on the distribution channel, it is advisable to calculate COGS in money (since using a percentage you can get incorrect data with different selling prices).
I wish you successful marketing activities!