The cost of sales will vary depending on the product or service you offer.Knowing what it is, will allow you to know how many monetary resources you should invest to achieve your final product or service, thus allowing you to have greater control over your assets and budgets, both in Marketing and Sales.Read on to learn more about it!What is the cost of sales?First, you need to know that this term is different from the sale price, since the latter is the cost of sale plus the profit that will be obtained by selling El Salvador Phone Number List your product or service.While the cost of sales refers to the expense made by the company to produce (in totality) the products it sells or services provided in a certain period of time.How does cost of sales change for different types of businesses?The type of cost of sale varies depending on whether a company is commercial or industrial, since the product or service offered by each one goes through different processes, so their cost of sales is different.In other words, in a commercial company a product or service is not manufactured so its sales process is much shorter, so determining its cost of sales is very simple.While the process in a manufacturing or industrial company is longer because its product or service is produced in this company, so specifying the amount you spend to sell is different and a little more complicated.How to calculate the cost of sales?Now, being companies whose process is different from each other, it goes without saying that the way to calculate the cost of sale varies, leaving the formulas for each as follows: commercial enterprise
The commercial enterprise cost of sales = beginning inventory of merchandise + cost of purchases – ending inventory of merchandise.Industrial companyThe cost of sales of an industrial company = beginning inventory of finished products + manufacturing cost of finished products in a period – ending inventory of finished products.What elements influence to determine the cost of sales?To determine the result of the indicator, it is necessary to take into account elements that will influence the calculation and that will depend on whether your company offers products or services.
It touches to highlight that either of the two will be included, depending on the type of organization, in the formulas of the previous point.ProductsThe cost of sales in a product includes:the cost of the raw materials that we have used to manufacture or produce said product; the cost of storing the products;direct and indirect labor costs;paperwork costs (in the case of imported materials);depreciation of products;product transportation costs;the taxes that apply in each case.ServicesIn the event that your company offers services, the associated elements are the following: Used materials;workforce;Overhead expenses (rent, salaries, stationery, etc.).Despite the fact that it seems that less aspects influence the cost of sales of a service, there are companies whose services are very complex so it should be evaluated more thoroughly.
conclusionThe calculation of the cost of sales provides a global vision and necessary to establish that the sale price is in accordance with the expense incurred.However, you should not forget that the sale price depends largely on your competition and the market, so if you need to lower the price of your product or service, it is necessary that you reduce your cost of sales and increase your sales force .As explained in the article, each product or service that we sell will have a specific cost, which will vary depending on the raw material needed, the personnel involved in its production or provision of the service, the distribution channel used, etc.Did you like the article and do you want to continue learning? So, do not hesitate to read our blog on Marketing and Sales , it will be very useful!