Hello,
I'm a little bit confused about COGS. In slide 17/49 you add into the income statement the COGS from inventory with COGS from COGS and related.
Now If I understood correctly the COGS from inventory part (line 137) represent the value in $ of COGS used for the production.
I don't have clear in my mind the reason to sum these COGS with the ones in line 47 tha are calculated as difference between Revenues and Gross Profit.
Normally If I sum two part of the same object these part have to be complementary. I don't see this aspect.
I hope that you can help me on this.
Thanks in advance for your help.
Stefano
Hi Stefano,
Thanks for the question. The model is describing two types of COGS - that which represents the physical inventory being utilised for production (e.g. bottles and cans used in the production of soft drinks), and a general catch-all COGS line for everything else (e.g. the labour and overheads directly associated with production).
Hopefully that provides some context as to why there might be two different types of COGS.
Kind regards,
Tim (SumProduct)
