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Sales = op. inv + production – closing inventory ..
Cost of goods sold = ope. inv + purchases – closing inventory .
is this two equation same ?
To convert sales into cost of goods sold , can i use first formulae ?
Sales only equals opening inventory + production – closing inventory in terms of numbers of units.
It certainly doesn’t equal that in terms of $’s!How can the two equations possibly be the same when goods are sold at a higher amount than they cost? !!
Sorry yeah. I now realise it. So is there any way to convert sales to cost of goods sold ?
i mean if there is a mark up of 50% how to convert sales to cost of goods sold ?
i understand that to find cogs = selling price / 1.5 is right.
i saw somewhere an application 50 / 150 or 150/50 to find it.. i am confused now
I understand it now. I should have subtracted it to arrive at COGS. Sorry to post this without thinking with patience. Thanks
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