Connect with us

# Calculating Costs of Goods Sold – Everything You Need to Know

Published

on

## Calculating Costs of Goods Sold

Cost of goods sold (COGS) is a measure of a company’s direct costs, not its salaries and other general and administrative expenses. As a result, it is an important component of a company’s margins and can influence business decisions.

### Cost of goods sold is a measure of a company’s direct costs

COGS is the measure of a company’s direct costs. For example, if a company is selling custom hoodies, it will have direct costs of raw materials and labor.

These costs are small compared to direct costs for services. The direct costs in COGS are calculated by subtracting the revenue from the cost of the goods sold. The net effect of these direct costs is the gross margin of a company.

COGS data can be found in a company’s income statement, which shows how much a company has earned and lost. COGS will appear under revenue, which means that it can be subtracted to get the gross profit figure.

COGS can also be found on the balance sheet, which lists the inventory as part of current assets. An understanding of COGS data can help investors make better pricing decisions and increase profits.

### It does not include salaries and other general and administrative expenses

Selling, general, and administrative (SG&A) expenses are operating costs that are not related to production. These costs can include executive salaries, bonuses for non-production staff, advertising, promotions, and travel expenses.

Different CBD marketing challenges and how to overcome them

Most SG&A expenses are fixed costs and must be covered regardless of sales.

Companies may find it beneficial to reduce these costs to increase profits without sacrificing business performance. By doing so, they can improve cash flow and price their products and services more competitively.

Salaries and other general and administrative expenses do not have a direct correlation with a company’s COGS. Although these costs are generally not included in the calculation, certain types of labor expenses are included when they directly affect sales.

One example of such expenses is payroll. An example of a bakery is a business that sells bread.

This company incurs operating costs to maintain the shop, post advertisements on social media, and pay employees. Other costs that are associated with a bakery’s COGS include rent for a building and hiring delivery drivers. Additionally, it has to purchase equipment, clean its shop, and train new employees.

### It is a key component of margins

When you’re running a business, understanding how to calculate costs of goods sold is imperative.

Cost of goods sold refers to the costs of manufacturing a product, including labor and materials.

Gross margin refers to the money that’s collected before expenses are deducted. The difference between gross and net margins is how much of each goes into the profit of the business. A business that has a high gross margin will be able to pass the savings onto the consumer.

Generally, the cost of goods sold (COGS) is a business’s direct cost of producing its inventory. COGS includes all costs directly allocated to the goods sold, excluding fixed costs and indirect costs such as overhead and sales and marketing.

COGS includes inventory, but different accounting rules allow for different approaches. Therefore, it’s important to know what the costs of goods sold are and why they impact margins.

How to Calculate the Free Cash Flow of a Business - 5 Tips to Know

### It is a major factor in business decisions

Calculating the cost of goods sold (COGS) is a crucial part of a manufacturing company’s financial statements. This metric measures the costs associated with producing and selling a product, and can be calculated monthly, quarterly, or annually.

Businesses may choose to calculate COGS monthly, or use an average cost calculation. In either case, the cost of goods sold includes all costs associated with the purchase, conversion, or production of the goods.

Businesses may also account for their labor costs, allocated overhead, and deferred cost of inventory.

The cost of goods sold, or COGS, is a vital factor in any business. This number is important because it indicates the total cost of producing a product.

COGS is an important factor in business decisions, because a high cost of goods sold will reduce the gross profit. By investing more resources in the production process, a company can improve its customer experience and maximize profit.

In addition to calculating COGS, businesses must also keep track of their manufacturing processes and assets.

### Conclusion

Please feel free to share with us in the comments section below.

Fact Check

We strive to provide the latest valuable information for our readers with accuracy and fairness. If you would like to add to this post or advertise with us, don’t hesitate to contact us.  If you see something that doesn’t look right, contact us!

# Navigating Corporate Tax Registration in the UAE: Gulf Business Solutions LLC

Published

on

In this dynamic market, with respect to UAE’s maze of corporate tax regulations, it is important for every business operating here to understand how corporate tax registration can be an answer.

This is because the UAE has a new tax environment which no other countries have such as; Value Added Tax (VAT) and Economic Substance Regulations (ESR).

In that case, getting to know how you can do your corporate tax registration, Gulf Business Solutions LLC help you keep up with the rules and also be a good business entity.

This process means that your business officially registers itself with the government so that it meets its duties in terms of taxes. It’s not only about obedience but even more for transparency and accountability within firms in UAE business industry.

Here’s a quick overview of the key steps to corporate tax registration:

• Obtain a Tax Registration Number (TRN)
• Understand Economic Substance Regulations (ESR)
• Register with Relevant Authorities

A company like Gulf Business Solutions LLC can assist you with the corporate tax registration process very easily. The professional team, which is aware of all UAE tax legislation, will ensure that your registration services are error-free and your business is fully compliant and ready to grow in the UAE market.

Fact Check

We strive to provide the latest valuable information for our readers with accuracy and fairness. If you would like to add to this post or advertise with us, don’t hesitate to contact us.  If you see something that doesn’t look right, contact us!

Groundfloor Review | Zero Fees & 10% Returns?

Published

on

Every startup will have some physical element to its work – whether it’s the production and delivery of a product, or issuing letters and marketing materials for a service.

As it happens, the logistics and fulfillment side of the startup industry faces challenges; as GeekWire highlights, there’s a huge amount of funding, millions of dollars, being pushed into that space to rectify issues.

For a startup, it’s important that you don’t let logistics issues get in the way of growth – starting with production, for product-based businesses.

## Hedging manufacturing costs

As S&P Global notes, the input costs of manufacturing remain high. As such, startups can expect to pay a premium to get their product out of the design room and into homes.

As such, it’s important to consider ways in which you can manage overheads and get the most out of manufacturing.

Opting for a factory that perhaps has higher initial costs but deploys smart manufacturing and uses state of the art machinery and inventory management, crucially through the setup of their conveyor systems and production line, can be important.

The same goes for choosing a warehouse operation for distributing your product.

## Managing warehousing

Warehousing is not cheap. In an industry dominated by larger tech players and in which courier services are taking up a lot of room, there is a premium on storage.

Indeed, analysts Lumper HQ reckon you’ll pay anywhere from \$0.75 to \$3.00 per square foot. Getting it right is important, and a focus on the same fundamentals of obtaining a proper manufacturing unit ring true.

What is a 3rd party fulfillment center? 5 Ways to make Money

Cloud and data prices are continuing to rise, according to Analytics India, with costs rising 35% through 2020 and rising still. As such, the cheapness of storing data, or producing a platform on which to host services or SaaS, is a shrinking matter.

Finding an affordable solution is important, but so is the sophistication of the software at hand. Looking to move platforms with regularity is an important principle, and is easily achieved – modern tools and methods make moving providers easy, for instance from AWS to Azure and in reverse.

The foundations of your startup business are not in executive operations or head office, but in the logistics that underpin the operation of the business.

Making sure that the actual physical work to deliver your product or service is undertaken smoothly is essential.

### Fact Check

Please feel free to share with us in the comments section below.

We strive to provide the latest valuable information for our readers with accuracy and fairness. If you would like to add to this post or advertise with us, don’t hesitate to contact us.  If you see something that doesn’t look right, contact us!

Published

on

In fact, the MBA degree ranks high on the list of master’s degrees that many universities promote, and this is mainly as a result of the existing market it has among professionals and students.

At the undergraduate level, universities typically award a business administration degree after a four-year course of study that focuses on areas such as accounting, finance, information systems, human resources, management, marketing, risk management and statistics.

In turn, the graduates from the sphere of study go on to develop skills for a wide range of jobs and enjoy the benefit of flexibility throughout their careers.

However, irrespective of educational background, many people decide to pursue an advanced study in business administration for several reasons. There’s an existing notion that MBA degrees are great for people looking to have a career boost or gain better business opportunities.

One of the top reasons that people pursue further study in business administration is that it helps them develop great personal and professional skills that will be useful in today’s constantly evolving world.

Have you been considering pursuing further studies in business administration? What are the possible benefits and impacts to gain from an MBA? Read on to learn everything you will need to know.

A degree in business administration typically entails introductory courses in general education and business fundamentals. A number of programs focus on areas that prepare you to pursue a career in your chosen specialization.

This graduate-level business and management degree focuses on leadership and managerial skills, so much so that earning it equips the professional with knowledge and skills that help accelerate their current employment situation.

Interestingly, MBA programs aren’t ‘one size fits all’ and have different categories that will depend on the goal you’re looking to achieve. The four major categories of MBA programs are full-time, part-time, executive, and global.

Whichever category of MBA program you opt for can also be on-campus, online or hybrid.

### Types of MBA concentrations

There are different concentration areas that an MBA offers, and the one you take will again depend on your skills, specialty or need. Some of the most common MBA concentrations available in programs today are outlined below.

### Accounting

This concentration is built on essential accounting knowledge and skills. You’ll typically learn general business courses such as financial reporting, managerial decision-making and accounting, business taxation, auditing, accounting information systems and attestation.

The advanced coursework in accounting will also typically contain advanced cost accounting, advanced data analytics, accounting ethics, fraud examination, forensic accounting and internal audit.

Those who take concentrations on accounting usually become accountants and auditors, and can be found within private organizations and public agencies. Others may pursue careers in consultancy, taxation or financial analysis.

### Finance

This concentration is hinged on learning to become an effective financial decision maker.

Here, you’ll be able to explore how financial decisions are made within organizations, and it includes aspects such as investments, assets buying and sales, fundraising and risk management. In reality, finance is such a broad topic, and an MBA program will typically cover investment analysis, corporate banking and real estate courses.

General concentrations may include supply chain management, enterprise valuation, derivative securities, principles of finance, real estate market analysis and principles of investments.

With a concentration in finance, you can take on roles such as security analysis, commercial, investment, and mortgage banking, financial analysis, risk management and portfolio management.

### Marketing

MBA programs also provide marketing concentrations because it has become essential in different industries today. A concentration in marketing ensures that you become an effective and creative decision maker within any business environment.

Marketing requirements will also cut through market research, rating strategies and establishing customer relationships.

A marketing MBA concentration will present typical professional coursework within product design, communication design, advertising, buyer behavior and financial analysis.

With this qualification, you can pursue different marketing careers in fields such as sales, product, brand development and advertising.

### Economics

Economics is another major concentration included in MBA programs, and it can include macroeconomics, microeconomics and business writing. The coursework will generally include behavioral economics, econometrics, economic research, labor economics, public finance and industrial organization.

With this concentration, you can pursue a career as an economic consultant, finance analyst, banker or marketer.

### Information systems

This concentration highlights information systems and skills that professionals need in order to grasp computer fundamentals, programming, data analytics, network design and systems security.

You’ll also be equipped with skills that use information technologies to solve business problems. You can expect to learn about business database systems, business analytics, strategic management, and operating networks and systems.

Business intelligence analysts, network administrators and cybersecurity managers are some of the roles that graduates of this MBA concentration can pursue.

Whether you are looking to enhance your career prospects, increase your earning potential, or gain a deeper understanding of the business world, an advanced degree in business administration can provide you with the skills and knowledge you need to succeed. Here are some benefits of pursuing an advanced degree in business administration

This is perhaps one of the most appealing aspects of studying for an MBA degree. It brings people together from different walks of life and interests and sifts out specific global perspectives relating to business.

With an MBA, you can broaden your business perspective just by engaging with peers and other professionals through discussions, group projects, a thesis and real-life practicals.

An MBA also provides specific programs that encourage cross-cultural and international activities in such a way that it will broaden your business perspective and prepare you for the high demand of the business world, irrespective of where you’re domiciled.

#### To expand your personal and professional network

Aside from what you learn, one major benefit of an MBA program is the people you meet and network with.

Throughout the program, you meet different people from different parts of the world and field, and if you can navigate it, they’ll quickly become a big part of your network.

From group projects during program days to the rich alumni network post-studies, you’ll be able to connect with people who can refer you to job opportunities or something else that will be useful for your career development.

Intentionally expanding your network is an important part of career advancement, as it opens you up to new and exciting opportunities.

#### To level up in your current career

Many MBA candidates admit that the major driver for their further education is finding the best way to level up their careers. In theory, some skills and knowledge picked up in an MBA program can also be gained during work experience.

However, not all workplaces or roles have the precise conditions needed to gain this requisite knowledge. On the other hand, an MBA presents you with the opportunity to gain the knowledge and skills you need to level up your career, even with a more focused approach.

Next Earth is unstoppable: plans the biggest Metaverse Fund

An MBA takes you through practical projects, responsibilities and clients that can fast-track your knowledge and skill build-up.

#### To allow you to pivot into a new career path

The great thing about an MBA is that it accommodates different career paths and trajectories. So, aside from helping you to advance your current career, it also comes in handy for professionals looking to pivot into new career paths.

An MBA makes it easier to transition to a new career path, irrespective of your experience level. An MBA can come into play as the education, skills and experience you need for a new role.

For instance, you may be looking to transition into a managerial role within an industry that you have no experience in, but an MBA can serve as your qualification.

#### To increase your earning potential

One aspiration that professionals have is to increase their earning potential. MBA degrees help you as a professional to earn more money than your contemporaries without the qualification. Also, organizations tend to hire professionals with MBA degrees. This means that you will become more marketable for better jobs or earning possibilities.

However, graduating with an MBA is not an automatic ticket to a salary increase. There are a number of other factors such as industry and location that will decide that. Ultimately, an MBA puts you in a better position to earn better than you currently do.

MBAs help to fortify professionals with a wide range of skills such as leadership, communication, strategic thinking and versatility, some of the high-level skills that corporate employers look out for during hiring processes.

These skills will enhance your work rate and procedural abilities at the workplace.

If your career goal is to master a skill or particular specialization in preparation for a business role, then an MBA program may benefit you.

An MBA degree program gives you an opportunity to learn about the different areas of business and see how they are all connected within the general business model. You can also choose to specialize in a specific business area right from the beginning.

When you choose a concentration that aligns with your goals, achieving them becomes much easier. Including a strong specialization on your resume shows career focus and can help you stand out from other professionals.

A great source of credibility is work experience. However, an MBA degree also goes further to establish expertise. Foundational degrees are used to show foundational skills, but MBAs, on the other hand, show practical skills and experience that will be useful in the chosen field of work.

An MBA degree on your portfolio will improve your credibility and heighten the chances of you being hired by potential employers.

#### To help improve communication and time management skills

Some skills are essential to the business world, irrespective of the field or specialization you find yourself in. Two of these skills include communication and time management, and studying for an MBA will help develop them.

Effective communication is an effective soft skill that’s developed through the process of studying for an MBA. Both written and communication skills are honed as you successfully convey different concepts of business projects to various people at several levels.

This skill can be transferred to a real-life situation at any organization in which you find yourself.

On the other hand, an MBA also helps you learn how to manage time and projects effectively. From extra-curricular activities and personal business to school work and course load, there are a number of things to juggle throughout the process of studying for an MBA.

#### To build on the flexibility of the degree

Most universities that offer MBA programs typically allow the option of choosing the best type of degree that suits your need and schedule.

As mentioned, there are full-time and part-time MBA programs, so you can look into your peculiar circumstances and choose the best option.

For those who are unable to attend on-campus education, the option of online programs makes it possible to get the level of education from the comfort of your home.

An advanced degree in business administration qualifies professionals to work in a wide range of industries, depending on choice and expertise. Some of them include the following.

Level of education: An MBA is often preferred.

Overview: A business consultant helps an organization to gain a competitive edge within the industry through recommendations and guidance. You’ll be able to conduct different studies on a business, analyze data that has been received, and use it to draw inferences that will be used in preparing managerial reports.

#### Market research analyst

Level of education: An MBA is often preferred.

Overview: A market research analyst can work individually and within teams. The role involves helping organizations recognize the products and services that work best for customer wants and the price to leave them at.

As a market research analyst, you’ll be able to monitor sales and marketing trends, create different customer data collection methods, and share them through manageable reports.

#### Executive marketing manager

Level of education: An MBA with a concentration in marketing, communications or business.

Overview: An executive marketing manager works on creating several strategies that will help their organization grow its competitive advantage to a point where it is sustainable.

As an executive marketing manager, you will oversee product or service launch from implementation and evaluation to collaborating with other departments to achieve goals.

#### Chief HR officer

Level of education: An MBA with a concentration in human resources, business or communications.

Overview: This is the highest-level position in the human resources field. As a chief HR officer, you’ll be in charge of defining and structuring major company policies, systems and goals as they relate to the employees of the organization.

Whatever organization you find yourself in, other HR officers and executives ultimately report to you.

### Conclusion

Business administration-related jobs are projected to grow by 8% within the next 10 years. An MBA can help you hone the right skills, gain great experience, and build the right personal and professional network.

However, as much as there are numerous benefits to pursuing an MBA degree, it’s important to point out that it isn’t for everyone or every profession. Before deciding to pursue one, ensure that you’ve done adequate research into your field and its prospects for the future. Look out for what hiring managers need and tailor your qualifications based on that.

Nevertheless, if you’re planning to pivot into a new field that essentially requires an MBA, or you need to ensure that you’re eligible for promotions in your current industry, then the accredited online MBA program at St. Bonaventure University is a step in the right direction.

Pursuing an MBA program is a significant commitment both on time and financial levels. It’s important to ensure that advancing your studies in business administration is indeed beneficial to your career and that the investments you’ll make are right for you.

However, you can be certain that the training you receive while going through the MBA program prepares you for the different opportunities and problems that exist within the career path you have chosen.

Fact Check