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by davoomac on November 29th, 2006

davoomac

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What kind of cost is "Cost of goods sold"? Period, Product, Fixed, or Variable?

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Answers. 3 helpful answers below.

  • by cami1211 on December 2nd, 2006

    cami1211

    Variable

    Fixed is rent and electricity -- things that dont change.
    COGS is variable because it changes with the amount you produce. It should go down as you produce more.

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  • by tjatherton on November 29th, 2006

    tjatherton

    It is the ACTUAL amount of money that was spent on the cost of goods that you are selling, there are several ways to figure this. FIFO or FILO.
    FIFO- First in, first out. When you sell the goods, you take the cost of the goods that came in first. If the costs have increased on that good since, you would take the lesser amount of money spent on the goods.
    FILO- First in last out, this is taking the cost of the most recent purchases and leaving the previous costs to sit on the shelf. If the cost has gone down on the items purchased, then the most expensive would be sitting on the shelf.

    Once you decide which method you will use, you can NEVER change your formula for the life of that business. so there is no advantage to choosing one over the other. Its just a method that you feel comfortable with.l

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  • by anonymous on November 29th, 2006

    anonymous

    I think it might be variable. Ido this in IT and you have a 'controller' e.g. how many customers and then you have fixed (heating, lights etc.) I think its variable because the more customers, the more demand for goods, more goods need, more cost?

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