Sales Cost Examples
We explain sales cost examples. Cost of sale can be defined as the initial investment that is made when acquiring a product either for manufacturing or resale and is the one that is deducted from the total cost to separate the final profit from the total cost.
It is not difficult to separate this cost, but in very high amounts it takes a lot of time and attention to separate the cost of sale from the rest of the additional charges and costs.
That is why the cost of sale is separated from the cost of production, advertising, rental of services and others that could be added to the cost of sale.
Cost of sale examples
The engineer Fausto Gonzales Estévez, is an importer, and among his imports he imports sherry brandy and to obtain his net profits, he intends to separate the cost of sale of the initial product from the profit and alternative expenses such as advertisements, services, commissions and taxes among others .
Due to the large amount and the high number of merchandise, Eng. Fausto hired an accountant, who will separate the cost of sale from the rest of the amounts awarded to that specific merchandise.
The accountant separated all the processes and framed the real cost of all the merchandise, leaving the initial cost separated from the rest of the production costs, import customs costs, transportation and government taxes.
The cost of goods sold would be separated as follows:
- Cost of each bottle US $ 100
- Final product sale US $ 200
- Direct profit: US $ 100
- The total cost of sale is US $ 100 and must be recorded as follows:
- Sales: US $ 200
- Cost of sales: US $ 100
- Gross profit: US $ 100
The total cost of 100 pieces would be 100,000.00 Dollars US $ 100 each bottle.
- Selling only 1 you get US $ 200
And for the same reason, the total cost of sales would be 200,000.00 Dollars.
- Cost of sale : US $ 100
- Gross profit: US $ 100
Remaining in the general balance that each bottle is US $ 100.