cost of sales or expense

Pat1234
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Cover User
Australia
Pat1234
Cover User

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cost of sales or expense

hi all,

 

Ive started using branded packaging for my products.

 

I understand that the packaging is a cost of sales, but the tooling charge from the manufacturer of the packaging I'm not so sure about.

 

Its what they charge for their machine to be set up to make our packaging.

Its a one off charge

 

Is it an expense or a cost of sales?

 

cheers

 

Patrick

2 REPLIES
Ultimate Partner GDay53
608 Posts
Ultimate Partner
Australia
GDay53
Ultimate Partner

608Posts

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Re: cost of sales or expense

@Pat1234

 

To be on the safe side you should check with the accountant.

But as a general rule, anything relating to the production of the product you sell can be classed as a cost of sale.

I have a client that has special packageing made for all their products they sell and everything to do with the cost of getting that packaging made is coded to the Cost of Sale accounts.

 

 

Graeme Day
Registered BAS Agent #24745540
First Class Accounts Clayfield

gday@firstclassaccounts.com
MYOB Certified Consultant
MYOB Diamond Partner
MYOB Staff Post RienaP
1,662 Posts
MYOB Staff Post
New Zealand
RienaP
MYOB Staff Post

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Re: cost of sales or expense

Hi @Pat1234,

 

I totally agree with @GDay53. My take would be to check with your accountant to get their advice as this can be bit tricky. 

 

My understanding is that everything directly related to getting goods ready for sale is the cost of sales but since it is one-off cost it can be classified as your expenses as well.

 

Should there be any other queries, please do not hesitate to bring it to this forum. 

 


Regards,
Riena
MYOB Training Specialist

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