Now if you were also assembling the product and you paid someone $5.00 to assemble it then the cost would rise to $6.50 per piece for the Cost of Goods Sold.
In another example you are a car dealer who sells used cars. Your cost of Goods Sold would be the price you paid for the car purchased, plus any parts and labor (mechanic repairs) you paid to make the car sellable. The total of these would then be your Cost of Goods Sold.
Basically any cost you put into the product to make it sellable is considered Cost of Goods Sold. This could be from buying paint to paint the product to the laborer who is applying it. But the cost has to be related directly to making product ready to sell.
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By Alamo Bookkeeping Associates