RE:RE:RE:RE:RE:RE:Share price Mauriceopp wrote: If you only manufacture one item all day, every day, calculating your total manufacturing costs for that product is easier.
We have not been talking about cost of manufacturing (COP), but cost of goods sold and that depends on changes in inventories and their evaluation.
COP and CGS are two different things. they are reconciled by any Change In Inventory.
Another example would be the value of oil inventory each month. Huge expenditure for oil while the ice road is open, big cash drain, but that expense goes into Oil Inventory, and is costed out as oil inventory drops throughout the year. Money (cash) spent on oil in November/December is zero, but drop in oil inventory is big expense on income statement. Might even create a loss in Q2.
Your example above is far too simplistic. CGS is dependent on ending inventories, so one cannot say ahead of time when all COPs will be applied.
I'll not comment further on this subject.