2nd October 2019

accountingcoach
8

What is the formula for cost of goods sold?

The cost of goods sold is the cost of the merchandise that a retailer, distributor, or manufacturer has sold. The second way to calculate the cost of goods sold is to use the following costs: beginning inventory + the cost of goods purchased or manufactured = cost of goods available – ending inventory.

Similarly one may ask, what is the total cost of merchandise purchased?

Add the company's cost of goods sold to its ending inventory and then subtract the company's beginning inventory. The resulting value is the total amount of the company's merchandise purchase for the month. Continuing with the same example, Company C's total amount of merchandise purchased for the month is $115,000.

What is a merchandise purchase budget?

Definition: A merchandise purchases budget is a financial plan that reports the total estimates costs or units of merchandise inventory that are expected to be purchased by a retailer in an accounting period. In other words, this is the budget that managers use to plan inventory purchases for the upcoming periods.
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