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 increase in the operating income is due to a better cost of sales.
For instance, my gross sales are $400,000, my cost of sales are $240,000 and I have fixed expenses of $170,000.
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.
However, the composition of the cost of sales figure from the income tax return deserves closer inspection.
Table 1: An example of a Cost of Sales calculation Item [pounds sterling] Cost of frames 48,515 Cost of uncut lenses 11,604 Cost of contact lenses 10,567 Cost of contact lens solutions 4,334 Cost of sundry items 1,089 Cost of running workshop 18,442 Adjusted cost of sales 94,551 Table 2: An example of sales income adjustment Item [pounds sterling] Total fee income 54,561 Add sales of spectacles, CLs etc 258,429 Less fees from sun tanning studio 2,180 Adjusted sales income 310,810
To begin the exercise, assume gross sales and cost of sales will rise 3% each quarter.
The main drivers for the improvement in earnings compared to previous guidance are higher uranium prices realized in contracts with market price adjustments; higher gross margin for SWU, as the average price billed to customers was higher and cost of sales was lower than expected; and the timing of expenditures for the American Centrifuge project.
This is due to a significant reduction in the cost of sales, sales and administrative costs, and research and development expenses, particularly the former two, both of which were reduced by a full three percentage points (when the items are taken as a percentage of sales).
As originally reported, both revenues and cost of sales included $229 million of power purchases that, due to a calculation error, were presented on a gross basis as opposed to a net basis.
Likewise, in 1987, Smith's had a cost of sales of $140 million.