Cost Of Goods Calculation

[former_member218051]

Hi All,

I want to know about cost of goods sold calculation.

I book a PO worth Rs. 149610.

Copy PO to GRPO. system created following JE

Goods Recd Not Invoiced 149610 (CR)

finished Product 149610 (DR)

Copy GRPO to Landed Cost for recording additional costs.. system created following journal entry

Finished Product 35764.22 (DR)

Custom Duty 30764.22 (CR)

Clearing 2000 (CR)

Octroi (Local) 3000 (CR)

Sold goods from the batch in which above GRPO was created. System created the following journal entry.

Customer 35956.00 (DR)

CST 705.00 (CR)

Sale Local 35251.00 (CR)

Finished Product 32634.71 (CR)

Finished Goods u2013 Cost Of Goods Sold 32634.71 (DR)

How this amount is debited and credited to Finished Product and Cost Of Goods Sold Account ?

Thanks

Malhaar

[Former Member]

Hi Malhaar......

General Cost of Goods Sold works like following.....

During GRPO:

Finished Product=149610

During Landed Cost:

Finished Product= 35764.22

So (149610+35764.22)/GRPO Qty=Per Unit Cost during GRPO

Now when you sale against above GRPO then

you COGS Will be

COGS= Per Unit Cost during GRPO*Sales Qty Dr,

Finished Product= 32634.71 (CR)

So this Finished Product 32634.71 (CR) is nothing but Per Unit Cost during GRPO*Sales Qty

Hope you got now.......

Regards,

Rahul

[former_member218051]

Hi Rahul,

In My GRPO in all there are e items in 2, 3 and 4 qty respectively.

During GRPO:

Finished Product=149610

During Landed Cost:

Finished Product= 35764.22

So (149610+35764.22)/GRPO Qty (9) = Per Unit Cost during GRPO (20597.135)

Now when you sale against above GRPO then

you COGS Will be

In my invoice i sold all the above items in qty 1 each so

COGS= Per Unit Cost during GRPO ( 20597.135) * Sales Qty(3) Dr,

Finished Product= 32634.71 (CR) does not come to this

So this Finished Product 32634.71 (CR) is nothing but Per Unit Cost during GRPO*Sales Qty

Am i doing something wrong ?

Thanks

Malhaar

[Former Member]

Hi Malhaar....

I guess your Valuation Method is FIFO that is why you are getting such effect....

Regards,

Rahul

[former_member218051]

Hi Rahul,

Yes , You are right.

Thanking you

Malhaar

[Former Member]

Great.....

Now if you clear then please close the thread.......

Thanks & Regards,

Rahul