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Topic: cost of goods sold

Inventory Accounting: When Should You Use the Weighted Average Cost?

Accounting cost methods are used to control how a businesses inventory expenses appear on the company books. The weighted average is an accounting cost method used to value a company’s inventory by applying the average cost of on-hand inventory to each item of inventory stock. This means that both the cost of goods sold (COGS) […] ... Read More

  February 6, 2019     

The Impacts of Inventory Stock Discrepancies in Accounting

When the number of stock recorded in your business’ records do not match up to your physical number of stock counted, this results in stock discrepancies. This is one of the main reasons stocktake is so important as it reveals if any such discrepancies exist. Discrepancies, if not prevented or detected, can bring about serious […] ... Read More

  October 23, 2018     

Five Effective Ways to Reduce Cost of Goods Sold

Cost of goods sold, also known as COGS, is one of the most important elements of your business to understand. COGS can be defined as: “The direct costs attributable to the production of the goods sold by a company. This amount includes the cost of the materials used in creating the good along with the […] ... Read More

  March 7, 2018     

Cutting Costs on Your Cost of Goods

No matter what good a company is producing, the cost of the materials needed to produce that product directly impact profits. Cost of goods sold, otherwise known as COGS, is simply the costs of the products produced and sold, or purchased and sold again by a company. The cost of goods can include the cost […] ... Read More

  February 26, 2018     

Accounting Basics for Your Inventory Stock

Inventory management is the precise control of a business’ inventory incorporating raw material, WIPs (works-in-progress) and completed goods. The reason why inventory must be managed accurately is that it costs money to acquire or make and therefore if not controlled properly, it can represent a huge money drain to the company. Therefore, a larg ... Read More

  January 8, 2018     

Delving into Discount Pricing Strategy

Pricing strategy is fundamental part of a marketing with a strong focus on generating revenue and, ultimately, profit for the company. In a marketing campaign, a pricing strategy, such as discount pricing, can be considered the pursuit of identifying an optimum price for a specific product. What makes a successful pricing strategy? Numerous factors ... Read More

  August 7, 2017     

Inventory Turnover Ratio: What is it telling you?

The inventory turnover ratio is the number of times a business sells and replaces inventory within a specified period. In effect, the inventory turnover ratio determines how long a company takes to sell its on-hand inventory and helps a business determine how well they are performing. Calculating Inventory Turnover The first task in establishing yo ... Read More

  June 6, 2017     

LIFO and when it is sensible to use it

‘First come, first served’ and ‘use the oldest milk in the fridge first before it goes off, dear’ among other phrases and situations all have a common denominator and present the same logic; we always seem to use the oldest of something in life first and the newest, the freshest, is kept for last. This […] ... Read More

  May 12, 2017     

The low down on the periodic inventory system

A periodic inventory system is a method of keeping track of inventory where inventory counts are only updated periodically. ... Read More

  April 21, 2017     

Unlocking the Inventory Turnover Ratio

In the inventory management context, asset turnover ratios are useful indicators of how well your business is using its assets to generate sales revenue. ... Read More

  November 7, 2016