AVCO method- Gross margin calc.

USA Discussion in 'Accounting' started by shirimu, Dec 30, 2013.

  1. shirimu


    Dec 30, 2013
    Likes Received:

    I am working in a retail business that buys products from vendors and sell them.
    We are using avg. cost method (AVCO) for inventory valuation.
    So each sale is being coasted based on the unit value at the time of the sale and we look on gross margin as:
    (Revenue- COGS)/Revenue

    I wanted to know what factors usually get to COGS?
    Does billbacks/vendor rebates and adjustments are enter to COGS?
    Is it has any impact on the avg. cost valuation? (or unit value that was extimated)

    shirimu, Dec 30, 2013
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