How are cost of sales computed

A SALES transaction added to a customer receipt / ledger should have a cost of sales associated with it. The cost utilized for Cost of Sale is set within the inventory entry for the style. There are two costs available within the inventory style entry.

The first is re-order cost. Re-Order cost is the cost the store will paid when the style is newly ordered. The second cost is the unit cost of existing quantity on hand (QOH) of of this style the store has hanging in store.

When an item is sold on a customer receipt / ledger with a status of Special Order, the sale is given the reorder cost, any other status is given the QOH unit cost as cost of sale.

Some shops may choose to depreciate their in store hanging inventory based upon factors as category, age and discontinued status of the inventory item. This is accomplished via the Cost Factor module. Any cost factors that affect the cost/value of the inventory item being sold from store will be carried forward to the sale of the item and become it's cost of sale. For example, say you have a gown with a $500 cost of purchase (inventory value). Because of it's age and discontinue status a Cost Factor entry is applying a 20% depreciation to it making the style show as a $400 cost/value in inventory. Now when the gown is finally sold to a Customer, the sales transaction's cost of sales will be set to $400.