adamriofc Cost Accounting
Tracks product and service costs so pricing and margin decisions are grounded in real numbers.
Core Methods
- COGS (Cost of Goods Sold) = Beginning Inventory + Purchases − Ending Inventory; ending stock is computed via a consistent method (FIFO/average).
- Absorption costing: all production costs (variable + fixed) enter COGS — per SAK EMKM for financial statements.
- Variable costing: only variable costs enter COGS; fixed costs are expensed as incurred — an internal analysis tool for short-term pricing decisions.
- Unit cost = Total production cost ÷ units produced; do not confuse it with the selling price.
Scope & Safety
- Use for: setting the minimum selling price, evaluating per-SKU product margins, make-vs-buy decisions.
- Do not use for: recognizing inventory value in financial statements with a method different from the chosen policy (must be consistent across periods).
- Overhead allocation (electricity, warehouse rent) is an estimate — document the allocation basis.
- Stock data must be physically accounted for (stock-taking) at least annually.
Worked Example
Input: beginning inventory 50 million; purchases 300 million; ending inventory 40 million; 2,000 units sold. Output: COGS = 50 + 300 − 40 = 310 million; COGS per unit = 310 million ÷ 2,000 = 155.000. If the selling price is 200.000 → gross margin per unit 45.000 (22.5%) before operating expenses.