Another "cost of goods sold" question

[starlygirl]

My business is manufacturing widgets. I purchase raw materials which eventually become part of the widgets and are charged to my "cost of goods sold".

My question is about supplies which are used in the manufacturing process, but don't actually become a part of the finished widget.

Are these supplies part of "cost of goods sold" as well? I'm assuming they are, because they ARE necessary in the process of creating the widget, despite the fact that they do not become an actual part of the widget.

[Essex_boy]

Your going to have to account for the waste some how, Id list them specifically in the PL under a more accurate costing label.

At least that way you can monitor wastage.

Speak with an acountant.

[Macbeth]

As a former Management accountant turned newbie ecommerce developer I might be able to help. Stock that is not used in the actual sale of goods is either

raw materials stock in the balance sheet

or

Work-In-Progress in the P&L (if they are semi finished) as a Debit.

Of Course make sure you cross reference what i said with a text book (or speak to your accountant informally if you already have one).

I hope this helps.

A

[Macbeth]

PS In the P&L it would go in the top as a Trading Acount which sits on top of the P&L.

This is known as the T,P&L which is used in manufacturing accounts.

Again, please check with some research or a textbook, but i'm pretty sure i'm right on this.