cost of sales


Also found in: Acronyms.

cost of sales

or

cost of goods sold

the relevant cost that is compared with SALES REVENUE in order to determine GROSS PROFIT in the PROFIT-AND-LOSS ACCOUNT. Where a trading company has STOCKS of finished goods, the cost of goods sold is not the same as purchases of finished goods. Rather, purchases of goods must be added to stock at the start of the trading period to determine the goods available for sale, then the stocks left at the end of the trading period must be deducted from this to determine the cost of the goods which have been sold during the period. See STOCK VALUATION.

cost of goods sold

or

cost of sales

the relevant cost that is compared with sales revenue in order to determine GROSS PROFIT in the PROFIT-AND-LOSS ACCOUNT. Where a trading company has STOCKS of finished goods, the cost of goods sold is not the same as purchases of finished goods. Rather, purchases of goods must be added to stocks at the start of the trading period to determine the goods available for sale, then the stocks left at the end of the trading period must be deducted from this to determine the cost of the goods that have been sold during the period. See STOCK EVALUATION.
References in periodicals archive ?
The issue with conventional budgets is that cost of sales is presumed to be fully variable, and management generally expects gross profit margins to remain stable.
While the increase of cost of sales over last year reflected the higher throughput from the Casa Berardi open pit operations, our cash cost, after by-product credits, declined 73% to $0.
Any expense that is not a direct cost of sales is a fixed expense--an expense that isn't going to vary, regardless of your sales.
Accordingly, a 50pc increase in natural gas price will increase cost of sales by roughly 5pc to 7pc.
If you have a glazing workshop within the practice you should add the costs of running the operation into the Cost of Sales.
When an auditor marks up the cost of sales taken from an income tax return, the resultant sales figure can easily be overstated.
So license fees contribute to the higher cost of sales, he said.
The higher cost of sales was also due to the increased contribution of gas to net sales.
Likewise, in 1987, Smith's had a cost of sales of $140 million.
At Tasiast, we are moving ahead with the Phase One expansion, which is expected to nearly double production, while reducing cost of sales significantly, at a manageable capital cost.