cost of sales

Controlling (CO)

The cost of sales is calculated when the goods are issued. Posting is not made to "Changes in inventory" (as is the case with period accounting) but to an account called "Cost of sales." This is set up in Customizing for account determination with goods issues.

Steps must be taken to ensure that all delivered goods have been posted and billing documents issued at the end of the period.

In the case of sales-order-related production with a nonvaluated sales order stock, delivery does not result calculation of the cost of sales. In this case results analysis must be carried out on the sales order items during the period-end closing activities. The results analysis data is then settled. Results analysis calculates the cost of sales for each sales order that was billed since the last settlement run. Any remaining amounts are work in process (WIP). If the order was fully billed, the entire WIP accumulated but not settled is posted to the cost of sales.