Costs in a marketing company

When one is a marketing company (company dedicated to the purchase and sale of products), the usual thing is to only denominate costs to the Costs of Acquisition, that is to say, the costs conformed by the value of the merchandizes that are bought, as well as to the payments related to this purchase, such as loads, insurances, rights of import, etc.

As we have seen previously, the accounting of costs does not have a method or standard system, but the company adapts the method or system that more is suitable according to its needs or objectives to him.

We see next an example of how to apply the accounting of costs in a marketing company:

We suppose that we initiated operations with a beginning inventory of 30 televisions with a cost of $100 each, soon we bought 10 televisions to $100 each, and later we sell 5 televisions to $300 each. If we have operative expenses of $400 (administrative expenses: $100 and expenses of sales: $300), which would be our net utility?

The Earnings statement would be:

Sales	1500 (300 xs 5)
(-) Cost of Sale	500 (100 xs 5)
Gross utility	1000
(-) Adm Cost.	100
(-) Cost Sales	300
Net utility	$90

When the merchandize that is acquired has different values from sale, for example, that the televisions of the beginning inventory are of $/,100, but the 10 which they were bought are of $/. 120, in that case it is not possible to find the exact Cost of Sale, because the unit cost of a television varies, in that case we must find an average average.

If we removed average average:

30 televisions x 100 = 3000

10 televisions x 120 = 1200

Total cost = 4200

Unit cost average: 4200/40 = $105

The new Earnings statement would be:

Sales	1500 (300 xs 5)
(-) Cost of Sale	525 (105 xs 5)
Gross utility	975
(-) Adm Cost.	100
(-) Cost Sales	300
Net utility	$575