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author's profile photo Former Member
Former Member

selling expenses

Hi,

I understand from the forum of this :

"for manufacturing, the cogs is determined by the cogm (direct materialsdirect labour production overehads) and in turn, cogs is COGM+All Indirect overheads."

1 May I know selling expenses, shipping & delivery charges, admin cost also part of COGS or it is not cogs but Operating expenses?

2 what would be the difference if they are part of COGS or part of operating expenses?

Thanks

Rgds

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    author's profile photo Former Member
    Former Member
    Posted on Aug 27, 2009 at 08:40 AM

    Hi,

    You can treat it in this way. COGM + Operating expenses(selling & advt expenses, shipping & delivery charges,

    admin, legal & professional expenses) = COGS. These are variable cost applied on COGM based on

    which sales margin and profit on sales is decided for particular product.

    Regards,

    Sadashivan

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    • Former Member Former Member

      Hi,

      I have given the standard approach and it is your company formulation to capture those costs out of COGS.

      My advise was based on a standard cost estimate. You can define the costing sheet to suit your company

      requirements.

      Best Regards,

      Sadashivan

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