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Technology Stocks : WDC/Sandisk Corporation
WDC 140.23-8.9%3:59 PM EST
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To: Zeev Hed who wrote (19468)3/6/2001 5:24:01 PM
From: limtex  Read Replies (1) of 60323
 
Zeev- What I am saying amounts to this:-

If you make ten objects at a total cost of $50 then the average cost is $5 each and if you sell six then you write off the cost of those six ie $30 in the qtr when they are sold and at the end of that qtr you have four in inventory in your balance sheet and they cost a total of $20 and that is the figure in your balance sheet at the end of that qtr.

If the next qtr you sell those four object then you write of the cost of them ie $20 in that qtr against the amount you sell them for. So if you sold then for $12 each then in the 2nd qtr in this example you would have revenues of $48 and cost of goods of $20 leaving a gross margin of $28.

That is how I understand accouting works.

Best regards,

L
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