cost of sales

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  • Avatar of targetacca
    targetacca
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    what is the cost of sales for a service providing concern like a gym, where we have different membership packages , and we also have nutrition products being sold?


    Avatar of Shayan Javed
    Shayan Javed
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    For Services:
    Of course, there would be no inventory. So there will be no need of dealing with stock measurements. Cost of sales would straightly be the cost of providing services.

    For Nutrition Products:
    in this case comes the concern of stocks. (How many products we bought + products which were in the closing stock of previous period – products which aren’t sold) x cost of products = cost of sales

    you may incorporate the concept of lower of cost or nrv, but that would make this understanding far more complex.

    for a service providing firm as you mentioned, there would be variety of stocks + services, each will be dealt separately, but amalgamated in one ‘cost of sales’ head

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