cogs for a cup of coffee

[otaatepe]

hi,

Planning to open a small coffee shop.

I see some people put labor and rent in cogs, some not.

So, can anyone please (accounting wise) tell me that apart from ingredients(milk, espresso, cup, sleeves,..etc), do I have to include labor, rent, tax, insureance..etc in COGS?

Thanks in advance.

 

[BPal75]

Labor for servers and such would be considered a cost of revenue and subtracted from revenue to arrive at gross margin. So basically any costs you incur to directly earn revenue (barista salary, coffee, cups, etc.) things like rent, taxes and insurance are considered operating costs below gross margin line. From a management perspective, folks will often look at contribution margin, which attempts to allocate all costs that can be attributed to a particular revenue item, both direct and indirect. That is not GAAP though.


Sent from my iPhone using Tapatalk

 

[myj39]

hi,if you want custom paper cups,you can contact us~email:[email protected],

 

[javanize.me]

Myj39,

This is rude! the owner of this post was asking accounting question and you invade his post to try to sell him cup.

This is misbehaving on forum culture.


You should first introduce yourself to the member of this forum, know who you are, where you come from, what you are doing etc. don't do direct sell. If someone is asking for cups, then post a referral and invite him to contact you, but not on cold like this.