how to work out the cost of sales?

meibaker

trial balance extract
opening inventories 150,000
purchases 470,000
closing inventories 250,000
admin exp 185,000
distribution 240,000
addition info:
the depreciation charges for theyear ended are to be apportioned as following
cost of sales 60%
distribution 20%
administrative 20%
how to work out cost of sales?? thanks

beaneygirl

Opening inventories + purchases - closing inventories= cost of sales

meibaker

beaneygirl wrote: »

Opening inventories + purchases - closing inventories= cost of sales

but the answers add the depreciation as well? i am not sure why and how!
suggested answer as following:
opening inventories .....150
dep ..........................18
purchases .................470
less closing inventories (250)
=cost of sales ............388

PGM

Depreciation is sometimes charged to administration, although it makes more sense to charge it to cost of sales as its likely to be depreciation on machines.

meibaker

PGM wrote: »

Depreciation is sometimes charged to administration, although it makes more sense to charge it to cost of sales as its likely to be depreciation on machines.

thanks PGM, i never know dep is charged to admin. i thought its only happen to machinery etc. but do you know how the depreciation is calculated in this question??

PGM

It must tell you the depreciation amount in the question?

Then you can split it by the % given.

meibaker

PGM wrote: »

It must tell you the depreciation amount in the question?

Then you can split it by the % given.

no, it didn't! only give the depreciation for land and building!