n8,i have to ponder a bit more but i dont think you can get COP...

n8,

i have to ponder a bit more but i dont think you can get COP using opening/closing stock.

accountants use opening stock and closing stock as the easiest way to work out gross profit.

one would think - oh its easy - why just take each invoice and subtract cost price and sum it all up. that gives gross profit. but in many businesses like grocery shops, where there are hundreds of sales made a daym. this becomes impossible, unless the opening/closing stock method is used.

o = value of opening inventory at cost price
p = value of produced goods at cost price ( over the 12 mths )
c = value of closing inventory at cost price

s = value of items sold at cost price ( over the 12 mths )
d = value of adjustments due to unsellable goods writeoff etc.

o + p - d = c + s

hence,

the diff between open and close is

o - c = s - p + d

but s = total sales including profit (TS) less profit (PR)

o, c, p, d and TS ( this is just turnover ) is easily obtainable.

so Profit PR can be worked out.

so again, the opening/closing stock method is to calculate profit.