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Item-wise COGS Calculation

Cost of Goods Sold (COGS) represents the direct costs associated with producing or purchasing items sold by your organization. PrismERP’s Item-wise COGS Calculation module provides a precise and systematic way to track the cost of each product sold—ensuring accurate profitability analysis and financial reporting.

What is Item-wise COGS Calculation?​

In PrismERP, Item-wise COGS Calculation refers to the automatic computation of the cost associated with each unit of inventory that has been sold. The system uses predefined costing methods (like FIFO or Weighted Average) and inventory transactions (such as purchase price, GRN, and stock movement data) to calculate COGS for each item sold.

This calculation is critical for:

  • Profit margin analysis
  • Accurate income statement preparation
  • Stock valuation
  • Business forecasting

✅ Key Features​

Automatic COGS Calculation​

  • Automatically triggered during sales transactions, delivery challans, or invoice posting.
  • COGS value is derived from the exact purchase or production cost of the item.

Costing Method Flexibility​

Supports multiple costing methods:

  • FIFO (First-In, First-Out): Uses the oldest inventory cost first.
  • Weighted Average: Averages all available item costs at the time of sale.

Item-Level Breakdown​

  • View COGS per product, per invoice, or per sales order.
  • Filter by item category, customer, warehouse, or date range.

Linked to Stock Movement​

  • Pulls real-time purchase and stock issue data for precise cost matching.
  • Integrated with GRNs, purchase invoices, and inventory adjustments.

Profitability Insights​

  • Compare selling price vs. COGS for accurate gross profit tracking.
  • Export reports for internal analysis or financial audits.

Accounting Integration​

  • Automatically updates the COGS ledger account upon posting a sale.
  • Fully linked with the general ledger and inventory sub-ledgers.

How to Access​

Navigate to Item-wise COGS Report

You can:

  • Select a date range
  • Choose items or product categories
  • Filter by warehouse or branch
  • Export the report to Excel or PDF

📌 Example Use Cases​

ScenarioSolution
You want to see profit per itemCompare COGS vs. sale price in report
Audit asks for proof of stock valuationExport COGS report with linked GRNs
Pricing is under reviewUse COGS insights to adjust markup and discounts
Finance team needs accurate marginsPull item-wise profit reports over time

💡 Tip: Run this report monthly or quarterly for strategic pricing and profitability analysis.

PrismERP ensures your business doesn't just sell smarter, but also understands how much it truly costs to make every sale.