#cost-of-goods-sold
Cost of Goods Sold
Learn how to calculate and track cost of goods sold for inventory valuation
Bookkeeping for Ammunition Reloading Supply Shops: Component Sales, FAET, and Lot-Level Inventory
A reloading supply shop that only sells bullets, brass, primers, and powder owes no federal ammunition excise tax — but loading and selling finished ammunition triggers an 11% FAET liability filed quarterly on TTB Form 5300.26. This guide covers the chart of accounts, lot-number FIFO inventory tracking, and hazmat freight costing that keep a component retailer or hybrid manufacturer compliant.
Bookkeeping for Antiquarian Booksellers: Why Rare Books Need Specific-Identification Inventory
Average-cost and FIFO inventory methods misstate margins when every item is unique. How antiquarian booksellers use specific-identification inventory — per-copy cost basis, proportional lot allocation, condition-driven write-downs, and provenance records — to keep accurate books on one-of-a-kind stock.
Auto Salvage and Scrap Metal Bookkeeping: Costing Inventory That Splits Into Five Products
How auto salvage yards and scrap metal recyclers should structure inventory accounting when one purchased vehicle splits into parts, high-value scrap, and bulk ferrous metal sold at different times and prices.
Dog Training Business Bookkeeping: Tracking Private Sessions, Group Classes, and Board-and-Train Revenue
How dog trainers should book private sessions, group classes, and board-and-train packages separately — using deferred revenue for prepaid series, COGS tracking for boarding costs, and clean 1099 vs. W-2 classification for instructors.
QuickBooks Online's Inventory Overhaul: Moving Average Cost, Bills of Materials, and What Small Manufacturers Should Know
QuickBooks Online now requires choosing between FIFO and Moving Average Cost inventory valuation and adds bills of materials with manufacturing orders. How MAC recalculates a blended unit cost on every receipt, why the costing choice is effectively permanent, and the bookkeeping mistakes — stale BOMs, untracked WIP, missing overhead — that quietly erode manufacturer margins.
Silversmith and Handmade Jewelry Maker Bookkeeping: Why Recipe-Based COGS Beats a Spreadsheet Guess
With gold near $4,200/oz in mid-2026, jewelry makers who cost pieces at historical purchase price lose margin on every sale. Recipe-based COGS — a fixed bill of materials, labor, and overhead per design, repriced at current metal replacement cost — plus channel-specific markups (2x direct, 3–4x Etsy, wholesale at 25% of retail) keeps pricing and books accurate.
Tariffs Aren't a Phase: 5 Bookkeeping and Inventory Moves Small Importers Are Using to Protect Margins in 2026
Only 3% of small importers still lack a tariff mitigation strategy in 2026, down from 57% waiting it out in 2025. Five bookkeeping moves protect margins — capitalize duties into landed cost instead of expensing them, scenario-model your top 20% of SKUs, track the carrying cost of buffer stock, price product-by-product, and record country of origin per batch.
Flipping Houses in 2026: Why the IRS Taxes Your Profit as Ordinary Income, Not Capital Gains
House flippers are almost always IRS "dealers," not investors — flip profits are ordinary income on Schedule C plus 15.3% self-employment tax, often a combined rate over 40% versus the 15–20% capital gains rate flippers expect. How the Winthrop factors decide dealer status, why rehab costs must be capitalized into COGS, and four strategies (including an S corp election) that reduce the hit.
Carpet and Upholstery Cleaning Bookkeeping: Why Every Truck Is Its Own Profit Center
Carpet cleaning chemistry should run 5–7% of revenue, a $25,000 truckmount costs about $10 per operating hour in wear, and drive time between jobs is the biggest hidden margin leak. How to book chemistry, trucks, and routes as three separate cost centers.
Fed Survey: 80% of Small Businesses Are Passing Tariff Costs to Customers — and Nearly Half Aren't Done Raising Prices
The Federal Reserve's 2025 Small Business Credit Survey finds 80% of tariff-paying small firms raised prices, 60% absorbed costs into margins, and 44-47% plan further increases — a "trickle up" pattern that means input costs haven't finished rising. Here's how to read the data and prepare your pricing and books.
June 2026 Inflation Report: Why a Cooler CPI Doesn't Mean Lower Supplier Costs
June 2026 CPI fell 0.4% — the largest monthly drop since April 2020 — cutting annual inflation to 3.5%, but core prices were flat and producer inflation still runs 5.5%. What the CPI/PPI gap means for small-business supplier costs, tariff pass-through, and fall contract negotiations.
Operating Margin, Explained: Formula, Industry Benchmarks, and How to Improve It
Operating margin — operating income divided by revenue — shows whether a business's core operation makes money before interest and taxes. Here's the formula with a worked example, 2026 benchmarks by industry (SaaS 15–35%, services 15–25%, manufacturing 8–15%, retail under 5%), how it differs from gross and net margin, and the bookkeeping errors that distort it.