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.
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.
If a company adds fake sales to boost its revenues, the cost of sales
as a percentage of revenue will increase.