Recharge Operation Accounting Protocol

Table of Contents

 

Cost of Sales Method

This method is used by recharge operations that are retail oriented. Since the cost of each product identified for sale is known, the rate (i.e., sales price) is determined by adding a markup to the cost of the item. The markup covers the operating costs (i.e., stock room clerk, twine) associated with selling the item. The markup is added to the cost of the item to determine the sales price. The following is an example for a stock room:

 

COST OF SALES RATE CALCULATION
ILLUSTRATION

The Stock Room recharge is establishing the following expenditure budget for fiscal year 200x.

 

Stock Room Recharge
Expenditure Budget 200x
(Includes only those expenditures allowable for cost recovery.)
 
 
 
Budget
Personnel Costs
$
10,000  
Services
9,000  
Supplies
2,500  
Travel
2,000  
Lease and Rental
3,000  
Occupancy and maintenance
2,000  
Depreciation
1,500  
Prior year fund deficit/<balance> if any
<1,900>
 
Total costs
$
28,100  

 

 

Stock Room Recharge
Estimated Cost of Goods to be Purchases for Resale in 200x
 
 
The stock room estimates that it will purchase the following amount of inventory in 200x.
 
Chemicals
$
40,000  
Glassware
20,000  
 
Estimated Cost of Goods to be Purchased for Resale
$
60,000  

 

 

 

Stock Room Recharge
Markup Calculation for Goods Sold in 200x
 
 
Total Expenditure budget for 200x
$28.100
 
 
Estimated Cost of Goods to be Purchased for Resale
60,000
=
47% Markup
  
 

 

 

Stock Room Recharge
Rate Calculation
 
Once the Stock Room's markup has been determined, the selling price for an item can be determined. With a 45% markup, the selling price for a pint of acid that was purchased for $10.00 would be $14.70.
 
       
Item Cost
$10.00
       
     
       
Markup rate
47%  
               
  Selling Price
=
  $10.00 x 1.47
=
$14.70  
       
 
 

 

 


E-mail comments about this site