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To: Zeev Hed who wrote (19468)	3/6/2001 5:24:01 PM
From: limtex	Read Replies (1) \| Respond to 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

To: Zeev Hed who wrote (19468)	3/6/2001 6:56:59 PM
From: Road Walker	Read Replies (1) \| Respond to of 60323

Zeev, re: "The COGS for any given quarter always include cost of product in the pipeline and does not contain the cost of product sold earlier (from inventory) in the quarter, that prior inventory cost is in the prior quarter." I'm not an accountant. But I always thought the COGS was calculated at the variable cost on the specific components for the products sold in the reported quarter. In other words, if you bought a widget last quarter that went into the whatchamacallit you sold this quarter, you recorded the cost against this quarters sales. The cost went into inventory last quarter, but counts on GM this quarter???? Could very easily be wrong, any accountants listening? John