So I know that you take your total costs (fixed & variable) divided by how many units you produced, but what constitutes as a cost? Initially, I thought it included inventory (money spent on products that haven't been sold) and loan payments (including principal) but then some people said I was wrong. Others said I was right.

I think you need to hire a CPA. There is no hard and fast answer to this. A lot depends on the nature of your business.

Figuring a cost per unit is generally for pricing purposes, not accounting or tax filings. So you can include fixed costs not related to production of a specific unit. Salaries paid to office staff, Phone and other utility bills, etc can all go into determining your cost per unit so you can apply a markup.

But for accounting and tax filings, you deal with total costs, not per unit.

I think you are having us on, if you want to know about accounting methodology read a textbook, your business has suddenly gone from some simple figures that really don't add up to something more complex than a buy/sell operation

I think you are having us on, if you want to know about accounting methodology read a textbook, your business has suddenly gone from some simple figures that really don't add up to something more complex than a buy/sell operation

Basically, all I'm trying to figure out is how to calculate how much a product I make costs. Looking it up, it says take your total costs and divide it by how many products you've made. But the problem is I don't know whether to include inventory or loan payments in the total cost. The reason it doesn't add up is because I'm trying to figure out how to add it up. And I can't tell which of my accounting people are right because one says that I include loan payments and inventory and the other says I don't because it isn't an expense

Again, if you are trying to figure out what it costs to make a product so you can determine pricing, then the answer is subjective. There is no right or wrong answer. If you are trying to enter numbers in an accounting ledger, there are hard and fast rules for that.

If you can't trust the advice you are given hire an independent consultant to both review their work and advise you

Based on your other question, I'm guessing this is another homework question, and like the other question, you pretended this was for an actual business you own, and not for an accounting question in college, and that's why we can't answer you, because you don't have the answers to questions we'd ask of a business owner that's actually in the position you're pretending to be in.

If you were the owner of this business, I'd advise you to hire a reliable accountant. As the accountant for a business scenario such as this, I'd advise you to find a job you can handle, and I'd advise the owner to hire a new accountant.

Alty this is old and he has already admitted he is a college student with nothing better to do than study accounting because he has failed at everything else

Based on your other question, I'm guessing this is another homework question, and like the other question, you pretended this was for an actual business you own, and not for an accounting question in college, and that's why we can't answer you, because you don't have the answers to questions we'd ask of a business owner that's actually in the position you're pretending to be in.

If you were the owner of this business, I'd advise you to hire a reliable accountant. As the accountant for a business scenario such as this, I'd advise you to find a job you can handle, and I'd advise the owner to hire a new accountant.

I was not pretending to be a corporation owner, I just used this as an example in hopes of figuring out how to calculate cost of goods sold

Cost of goods sold is a calculation based on the purchases in a period adjusted for movement in inventory

Cost of goods sold is a calculation based on the purchases in a period adjusted for movement in inventory

Still don't get it. What does "adjusted for movement in inventory" mean?

What doo YOU think it means?

Still don't get it. What does "adjusted for movement in inventory" mean?

If you cannot understand English I suggest you change your course of study. This isn't rocket science, but I can calculate your trajectory

Still don't get it. What does "adjusted for movement in inventory" mean?

Oh my. Allen, this simple question, very very simple question, makes me worry about your chosen career even more. If you cannot even decipher this, you will be lost in the world of accounting, which it seems you already are.

This is worrisome.

I gave up even reading these...

He is NOT cut out for Accounting, no aptitude at all.

I have ZERO accounting schooling, training or experience and most of these appear pretty obvious even to me.

But that's not being mean....everyone has things they are NOT cut out for....I do, he does, everyone does. I feel its like flogging a dead horse to continue trying to be something you have no aptitude for.

DO I wish I had a knack for programming? Yes I do....but I learned over 35 years ago...How programmers think conflicts with my thought processes, and I really am not good at it. But I am good at other things, those are what I have chosen to pursue.

What doo YOU think it means?

Well, I would assume it means moving your inventory from one space or area to another, but then again, these accounting terms never mean what you'd think they mean, so I don't know.


If you cannot understand English I suggest you change your course of study. This isn't rocket science, but I can calculate your trajectory

I do understand English, I just don't know all this fancy-schmancy accounting terminology. Apparently I guess I have to recite the dictionary front and back in order to understand this


I gave up even reading these...

He is NOT cut out for Accounting, no aptitude at all.

I have ZERO accounting schooling, training or experience and most of these appear pretty obvious even to me.

But that's not being mean....everyone has things they are NOT cut out for....I do, he does, everyone does. I feel its like flogging a dead horse to continue trying to be something you have no aptitude for.

DO I wish I had a knack for programming? Yes I do....but I learned over 35 years ago...How programmers think conflicts with my thought processes, and I really am not good at it. But I am good at other things, those are what I have chosen to pursue.

Good, one less person commenting "You're unteachable and shouldn't be an accountant" in the comment section. But of course I'm not cut out for accounting, especially if I'm getting answers like these.


Oh my. Allen, this simple question, very very simple question, makes me worry about your chosen career even more. If you cannot even decipher this, you will be lost in the world of accounting, which it seems you already are.

This is worrisome.

For the love of God, apparently it's not that simple of a question, because 4 users replied and had answers that had nothing to do with the question. I assume it means to move your inventory from location A to location B but I doubt it. And before you call me an idiot or something equally stupid, I did read the definitions of the words "Movement" and "Inventory" and formed that conclusion. So my answer is just based off what the dictionary says those words mean.

"movement", in the context of inventory is goods that have been sold or otherwise disposed of. I used the word "adjusted" In accounting we do calculations and record transactions .

Just for the exercise, you may have heard the phrase over thinking but I don't think that is your problem.. Inventory is stock in hand, goods in hand, etc, a term defining items held. Sales is a term for items sold and no longer in our possession. Purchases is a term for the cost of items purchased. Perhaps, sold, perhaps remaining in inventory. You wanted to know how to calculate Cost of Sales. A precise methodology can be found in any accounting fundamentals text. You can make your captions as large and as explanatory as you want, we prefer simple captions. Now you can labourously assign every item purchased to every sale if you want to but it is simpler to take an overall approach

"movement", in the context of inventory is goods that have been sold or otherwise disposed of. I used the word "adjusted" In accounting we do calculations and record transactions .

Just for the exercise, you may have heard the phrase over thinking but I don't think that is your problem.. Inventory is stock in hand, goods in hand, etc, a term defining items held. Sales is a term for items sold and no longer in our possession. Purchases is a term for the cost of items purchased. Perhaps, sold, perhaps remaining in inventory. You wanted to know how to calculate Cost of Sales. A precise methodology can be found in any accounting fundamentals text. You can make your captions as large and as explanatory as you want, we prefer simple captions. Now you can labourously assign every item purchased to every sale if you want to but it is simpler to take an overall approach

Still don't really get what you meant by adjust but aside from that, great explanation. Thanks! So just to recap, Inventory is unsold products and that "Movement" means that an item in inventory moves from inventory to sold items, right? Also, one last question. What's a caption? I know it means the title of something in everyday speech, but what is the definition of it in accounting terminology?

A caption is the name of an account or group of accounts in a report or listing of accounts

A caption is the name of an account or group of accounts in a report or listing of accounts

Thank you

Well, I would assume it means moving your inventory from one space or area to another, but then again, these accounting terms never mean what you'd think they mean, so I don't know.



I do understand English, I just don't know all this fancy-schmancy accounting terminology. Apparently I guess I have to recite the dictionary front and back in order to understand this



Good, one less person commenting "You're unteachable and shouldn't be an accountant" in the comment section. But of course I'm not cut out for accounting, especially if I'm getting answers like these.



For the love of God, apparently it's not that simple of a question, because 4 users replied and had answers that had nothing to do with the question. I assume it means to move your inventory from location A to location B but I doubt it. And before you call me an idiot or something equally stupid, I did read the definitions of the words "Movement" and "Inventory" and formed that conclusion. So my answer is just based off what the dictionary says those words mean.

You are going to HATE accounting because you aren't going to be any good at it... and that's even if you can impress an employer enough to get a job much less keep it.

But then, some people need to waste huge amounts of their life and time trying to learn something that people with more aptitude in would pick up very easily. Before they come to the decision they made some bad choices.

Get snooty all you want..it doesn't change reality. I've seen a lot of people very much like you try to do the very same thing before they finally give up and waste years before trying to take up something totally different they are good at.

A stocky short guy with short legs isn't ever going to make it as a sprinter on a track team no mater how stubborn he might be or how much his heart is in it. If we wanted to be mean we would be...we are trying to get you to see reality before you waste too much more of your life.

It doesn't matter what we tell this guy he doesn't get it. Accountants are not bookkeepers, they are educated people. It took me six years of hard work to do the basic degree and extensions and I never failed a subject. I think what has let this person down is comprehension, he hasn't learned to understand more that basic concepts, hasn't learned to see wider meanings. An Accountant has to be able to listen and understand what anyone is saying

It doesn't matter what we tell this guy he doesn't get it. Accountants are not bookkeepers, they are educated people. It took me six years of hard work to do the basic degree and extensions and I never failed a subject. I think what has let this person down is comprehension, he hasn't learned to understand more that basic concepts, hasn't learned to see wider meanings. An Accountant has to be able to listen and understand what anyone is saying

And I'm sure you have seen that some people have more of a natural talent working with numbers and certain concepts than other people have. I do agree with what you are saying, and expanding it even further. It doesn't imply dumb or uneducated, some of the people I saw that were the worst at programming were at the top of the class academically in an Engineering program (this is just an example). And just like ANY other thing.. unless you master something more basic, you are NOT prepared for anything more complex. Not everyone is cut out for just anything. Key is finding what you ARE good at.

You are going to HATE accounting because you aren't going to be any good at it... and that's even if you can impress an employer enough to get a job much less keep it.

But then, some people need to waste huge amounts of their life and time trying to learn something that people with more aptitude in would pick up very easily. Before they come to the decision they made some bad choices.

Get snooty all you want..it doesn't change reality. I've seen a lot of people very much like you try to do the very same thing before they finally give up and waste years before trying to take up something totally different they are good at.

A stocky short guy with short legs isn't ever going to make it as a sprinter on a track team no mater how stubborn he might be or how much his heart is in it. If we wanted to be mean we would be...we are trying to get you to see reality before you waste too much more of your life.

So what you're telling me is I'm unable to learn? My mind is at it's fullest potential right now and can't expand now matter how hard I try? It just seems like that's what you're implying.

It doesn't matter what we tell this guy he doesn't get it. Accountants are not bookkeepers, they are educated people. It took me six years of hard work to do the basic degree and extensions and I never failed a subject. I think what has let this person down is comprehension, he hasn't learned to understand more that basic concepts, hasn't learned to see wider meanings. An Accountant has to be able to listen and understand what anyone is saying

I am aware an accountant isn't the same thing as a bookkeeper. And most of the simple/basic concepts are hard to grasp for me because a lot of teachers and writers make them not as simple by dropping fancy words (i.e. economical, inordinate, acquisition, compound interest, etc.) in the text or lesson. Now maybe with some definition or some explanation as to what the words mean, I'd be able to understand, but they don't give any. And sometimes I'll read a few finance texts/books and they might contradict each other. For instance, one book said that when you try to find cost per unit, you include principal and interest payments, and another said that you just include interest payments. Sorry if I come off as being snooty or difficult to deal with.


And I'm sure you have seen that some people have more of a natural talent working with numbers and certain concepts than other people have. I do agree with what you are saying, and expanding it even further. It doesn't imply dumb or uneducated, some of the people I saw that were the worst at programming were at the top of the class academically in an Engineering program (this is just an example). And just like ANY other thing.. unless you master something more basic, you are NOT prepared for anything more complex. Not everyone is cut out for just anything. Key is finding what you ARE good at.

First off, I'm just starting from the bottom/basic concepts. The main problem I have with comprehending them is because a lot of the explanations are vague and/or use terminology I don't understand at the level I'm at.

Allen the first principle is KISS, explanation; keep it simple stupid, why are you trying to use concepts like cost per unit when you haven't mastered the basics? I have a cost handbook which literally describes a large number of methods of determining cost per unit, these are advanced concepts. Those terms you used are all defined in a dictionary and accounting usage and understanding is not likely to be different. Remember the definition of accounting, it is a social science that measures and records the interaction between entities in financial terms. The operative words here are financial terms. If you can't put a dollar value on it we call it a contingency and consign it to the back of the cupboard. You must realise that you are dealing with higher learning and every profession has its own set of terminology. We do not describe things at grade school level. You are fortunate we don't use latin terms as the medical profession do. Don't pick from one text then another, get a text and follow it through from start to finish. You cannot study accounting by searching the net

Allen the first principle is KISS, explanation; keep it simple stupid, why are you trying to use concepts like cost per unit when you haven't mastered the basics? I have a cost handbook which literally describes a large number of methods of determining cost per unit, these are advanced concepts. Those terms you used are all defined in a dictionary and accounting usage and understanding is not likely to be different. Remember the definition of accounting, it is a social science that measures and records the interaction between entities in financial terms. The operative words here are financial terms. If you can't put a dollar value on it we call it a contingency and consign it to the back of the cupboard. You must realise that you are dealing with higher learning and every profession has its own set of terminology. We do not describe things at grade school level. You are fortunate we don't use latin terms as the medical profession do. Don't pick from one text then another, get a text and follow it through from start to finish. You cannot study accounting by searching the net

Although you don't recommend me to search on the net to learn accounting, to which I understand and agree to a certain extent, what about if I took an online course? Should I change to that or just stick with textbooks and stuff like that?

I was under the impression you were doing a college course, any course you undertake you must follow step by step

I was under the impression you were doing a college course, any course you undertake you must follow step by step

I am but I do some research and studying in my free time

I am but I do some research and studying in my free time

But Allen, you're doing most of your learning, or attempting to understand what you're learning, online. Accounting is learned from books and classes, and doing. You really won't learn a lot online.

You're asking about basic things, and you're struggling with those basics, and we're struggling to help you because you also struggle to explain what you need help with.

My advise to you is to talk to your professor, tell him you're having trouble learning the concepts of accounting. Tell him you're struggling. Ask if he can recommend a tutor for you, because really, a person that can sit with you while you're doing your work, and then explain what you should be doing, is your best bet if you're bound and determined to stick on this course.

I'm not trying to be mean, but I will say this, at best I can see you as a bookkeeper. I really don't think you'll ever be a CPA (Chartered Professional Accountant), but this is the only thing you've decided you're any good at, so I do hope you succeed. In order to have any success at this, you need to tell your professors that you're struggling. You're paying a lot of money to go to college, and they're there to help you and teach you, so ask for the help, get the help, get a human tutor, someone that can sit with you and help you with the things you're struggling to grasp. That's really the only way I can see you having a snowball's chance in hell of reaching your goal.

I wish you all the best. Get offline, get help from the people you're paying to teach you!