how to work out the cost of sales?
meibaker
Registered Posts: 481 Dedicated contributor 🦉
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
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
0
Comments
-
Opening inventories + purchases - closing inventories= cost of sales0
-
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 ............3880 -
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.0
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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??0 -
It must tell you the depreciation amount in the question?
Then you can split it by the % given.0
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