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The McGraw-Hill 36-Hour Course: Finance for Non-Financial Managers 3/E, 3rd Edition by Robert Cooke, Susan Shelly, H. George Shoffner

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CHAPTER 3KEEPING SCORE: COST OF SALES

Looking for a business that will allow you to put every dollar of sales in your pocket? So am I. I doubt that either of us will find one. A business that sells products must buy or manufacture those products. As discussed in Chap. 1, that expense is called cost of goods sold. An enterprise that provides services will find that the people it hires to perform the services expect to be paid for their efforts. That labor usually is called cost of sales or cost of services.

COST OF GOODS SOLD

In Chap. 1, the Spouse House Company started in business by buying garden sheds from Fred’s Sheds for $900 and selling them to buyers for $1,500. The $900 that the company paid for each shed was the cost of goods sold. Simple, ...

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