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Describe the differences in procedures of computing cost of sales of a manufacturing company as compared to a trading company.

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Question ajoutée par Utilisateur supprimé
Date de publication: 2014/08/19
Abdul Rahim Zakaria
par Abdul Rahim Zakaria , Managing Partner , Al Mihad Training

For trading company, it is simple to calculate the cost of sales. The material purchase price and any other cost relating to material purchase  for example custom duty, transportation cost, insurance cost etc. relating to material purchase will be included.

On the other hand for manufacturing company, the cost calculation is little complicate where cost of material (including duties, transports, insurance etc), labor cost, overhead (depreciation, electricity etc.) will be included which converts the product into marketable condition.

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