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Under Chart of Accounts, we have cost of Sales, how is it calculated in SAP?

Normally, Cost of sales is calculated by adding the purchase and related expenses to the opening stock and then deducted from the closing stock. But how does SAP determines this? Also, where can we find the opening stock in SAP?

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2 Answers

  • Jul 06, 2017 at 05:33 AM

    Hi Abdul,

    Cost of Sales in Chart of Accounts depends on Localization.

    In certain Localization it will be kept as separate Drawer

    It relates to the Cost of good sold/service ledgers. These ledgers get impact based on the Inventory item and GL determination settings

    In terms of Value:

    Cost of sales in SAP B1 is determined from the Item Cost. Item Cost depends on you valuation method FIFO/ Moving Average.

    If its a trade business the item cost is calculated as per the purchase price and the valuation method. In this you can include the other expense cost such as Custom duty , freight cost etc as Item cost . While at sale invoice the inventory account gets credited and COGS ledger gets debited.

    In case of manufacturing the finished goods COGS is determined by the raw material cost and resource/labour cost as per the BOM settings. Similarly at sale invoice the inventory account gets credited and COGS ledger gets debited.

    Ex COGS = Total purchase - Inventory Balance

    Qty = 800 - 600 = 200

    Value = (800*10) - (600*10) = 2000

    For opening Stock

    Run the Inventory posting list report under Inventory report. You need to use Sql query report to customise as per the need.

    Regards:

    Balaji.S

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  • Jul 08, 2017 at 09:02 AM

    When you sale any item following entries posted

    1- Cost of Sales-------- Debit

    Stock -----------------------------------Credit

    2- Receivable -----------Debit

    Sales--------------------------------------Credit.

    Similarly these cost of sales account can also be used while posting goods issue.

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