What is cost of goods sold? Explain?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 3DQ: How do you calculate the markup on cost of goods sold? Is the markup pure profit? Explain.
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What is cost of goods sold? Explain?
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Step 1
Cost of goods sold is the accumulated total amount of all the direct costs incurred in manufacturing the goods or the products which has been sold during a period.
Step 2
Cost of goods sold includes direct material costs (including freight or shipping charges), direct labor costs, and manufacturing overheads expenses.It is a temporary account, thus it will be closed at the end of each accounting period. It will be reported on the income statement of the business.
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