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Cost of Goods Sold records the Value of the items you sell.
Note: Accounting Preferences has flag for standard or actual costing
Scenario 1 - Standard Costing
X = Standard Cost from Item Master
Y = Actual Cost from Inventory
GL Entry upon OE day end is:
COGS X
Cost Variance Y-X If Y>X
Cost Variance X-Y If X<Y
Inventory Control Y
Example from above:
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COGS @ Actual
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75.00
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Cost Variance
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5.00
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Inventory @ STD
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70.00
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Scenario 2 - Actual Costing
X = Std Cost from item main
Y = Cost from Inventory Items
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COGS @ Actual
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75.00
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Inventory @ Actual
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75.00
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Note: Credit notes are the reverse for both scenarios.
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