The right data security software
Posted: Mon May 26, 2025 7:36 am
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As noted above, however, COGS calculations can vary depending on your business model and whether or not you’re producing your own product from scratch, so we’ll walk through the specifics next.
Methods of calculating COGS
There are two main accounting methods for determining how to america phone number list calculate COGS — specific identification and weighted average cost. Once you choose a method, it’s important to remain consistent with your accounting to get an accurate analysis of your business.
Specific identification
This method calculates the costs of goods sold by carefully tracking inventory and adjusting the balance whenever a unit is purchased. Specific identification is often preferred for businesses that have unique, high-end products like cars or fine jewelry because each inventory item represents a unique, often high cost.
For example, Jane is a handbag reseller. She goes to estate sales and buys vintage designer handbags. After she cleans them up and makes minor repairs, she puts them up for resale on her website.
As noted above, however, COGS calculations can vary depending on your business model and whether or not you’re producing your own product from scratch, so we’ll walk through the specifics next.
Methods of calculating COGS
There are two main accounting methods for determining how to america phone number list calculate COGS — specific identification and weighted average cost. Once you choose a method, it’s important to remain consistent with your accounting to get an accurate analysis of your business.
Specific identification
This method calculates the costs of goods sold by carefully tracking inventory and adjusting the balance whenever a unit is purchased. Specific identification is often preferred for businesses that have unique, high-end products like cars or fine jewelry because each inventory item represents a unique, often high cost.
For example, Jane is a handbag reseller. She goes to estate sales and buys vintage designer handbags. After she cleans them up and makes minor repairs, she puts them up for resale on her website.