Cost of goods

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In accounting and trade , the cost of goods is the sum of all goods sold in a financial year , valued at the cost price .


In trade, the cost of goods is of particular importance because it accounts for a disproportionate share of the total costs and represents business activity. The trading companies procure the goods or commodities and typically sell them without further processing . The equivalent in industry to the cost of goods is the cost of materials .


The starting point on the goods account is the opening balance at the beginning of the financial year, the changes of which during the financial year lead to an ending balance on the balance sheet date due to additions ( purchasing ) and disposals ( sales ) :

  + Warenzugang
  - Preisnachlass (Rabatte, Skonto)  
  - Warenendbestand
  = Wareneinsatzmenge 
  × Einstandspreis 
  = Wareneinsatz

The price reductions ( rebates , discounts ) achieved on purchases are to be deducted from the purchase costs and compared with the final inventory determined by the inventory . The resulting cost of sales is to be multiplied by the cost price to get the cost of sales. Since the difference in the sales of goods results from the comparison of the receipt and the final inventory, the cost of goods is nothing other than the quantities of goods sold during the financial year. The gross profit results from the sales minus the cost of goods.

While the goods are valued at their sales prices in sales , they are valued at their cost price in terms of cost of goods. The recording of the price reductions and purchase costs means that the cost of goods no longer shows the goods sold in the course of the financial year at purchase prices, but at cost prices.

The cost of goods is also the difference between the incoming and outgoing goods .

Cost of sales

The cost of goods quota is an economic key figure that is widespread in the entire trade and is particularly used in the catering and hotel industries. It shows the percentage ratio of the cost of goods to sales and compares the cost of goods with the sales, whereby it shows the efficiency of the use of goods.

The difference between the cost of sales quota and 100% is the trade margin . For example, if the cost of sales is € 400,000 and the turnover is € 1,000,000, the cost of sales quota is 40% and the margin is 60%. About the cost of sales ratio, conclusions can be on suppliers , cost prices , used raw materials and their own pricing policies draw. In the case of branches of restaurant chains (e.g. in system catering ), comparisons can also be made using the cost of sales ratio. Its counterpart in industry is the material intensity .

Cost of goods in retail

In 2013 there were the following sales quotas in German retail : electronics 69.5%, toys 69%, bookstores 68.3%, sporting goods / camping 68%, furniture retailing 63.2%, glass / ceramics / porcelain 61%, shoes 60, 8%, perfumery 54.6% or home textiles specialist retailers 52.7%. Compared to the sales achieved, the cost of goods for electronics and toys is relatively high and even for home textiles it still accounts for more than half of sales.


Internationally and, for example, according to the American accounting regulations GAAP , the term cost of goods must be differentiated from the costs for goods sold , which correspond to the so-called cost of sales according to the German Commercial Code . The latter are broader than the cost of goods and include z. B. Personnel costs and overheads .

Individual evidence

  1. Niklas Brasat, Internal Benchmarking in Retail Enterprises as a Basis for Value-Oriented Management , 2012, p. 82
  2. Carl-Christian Freidank / Patrick Velte, Accounting and Accounting Policy , 2013, p. 185
  3. Statista the statistics portal, trade margins in electronics retailers in 2013