COGS OR COST OF SALES
This query is : Resolved
CA Abhishek Singh
(Querist)
02 April 2010
INCOME STATEMENT
SALES 90000
LESS: COGS
RM CONSUMED(20% OF COST OF SALES)
DIRECT WAGE(5% OF COST OF SALES)
DIRECT EXPENSES
TOTAL COGS (720000)
GROSS PROFIT 180000
LESS: OTHER EXP (150000)
NET PROFIT 30000
PLEASE CALCULATE RM CONSUMED,DIRECT WAGES,DIRECT EXP.
I CALCULATED 20% AND 5% ON COST OF SALES
I.E.SALES-NP=900000-30000=870000
BUT IN AINAPURE BOOK THEY CALCULATED IT ON COGS.
PLEASE EXPLAIN.
THANKS IN ADVANCE
ABHISHEK SINGH
SALES 90000
LESS: COGS
RM CONSUMED(20% OF COST OF SALES)
DIRECT WAGE(5% OF COST OF SALES)
DIRECT EXPENSES
TOTAL COGS (720000)
GROSS PROFIT 180000
LESS: OTHER EXP (150000)
NET PROFIT 30000
PLEASE CALCULATE RM CONSUMED,DIRECT WAGES,DIRECT EXP.
I CALCULATED 20% AND 5% ON COST OF SALES
I.E.SALES-NP=900000-30000=870000
BUT IN AINAPURE BOOK THEY CALCULATED IT ON COGS.
PLEASE EXPLAIN.
THANKS IN ADVANCE
ABHISHEK SINGH
CA. O.P. Agarwalla
(Expert)
19 April 2010
What I have understood is as under:-
Sales 9,00,000/-
Less: Cost of goods sold 7,20,000/-
G.P. 1,80,000/-
Direct expenses 1,50,000/-
N.P. 30,000/-
DETAILS OF COGS
r.m. 144000
d.w. 36000
Sales 9,00,000/-
Less: Cost of goods sold 7,20,000/-
G.P. 1,80,000/-
Direct expenses 1,50,000/-
N.P. 30,000/-
DETAILS OF COGS
r.m. 144000
d.w. 36000
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