COGS Sub-S

[Kurly]

Potential new client. They sell a complete computerized office system ( I wont go into detail on it, because it involves many aspects). The sell mainly to large corporations. Part of the training they provide to the buyer is a ten day detailed training. The cost for education, training, airfare, lodging, meals and all training materials are provided by the seller. The other preparer has all these items listed under COGS. at about a $25,000.00 a pop. This is where they belong or not. The cost of paying for the trainers for this is also listed in COGS.

Am I making sense as to my question. These are COGS expenses RIGHT or NOT? How about the entertainmet costs etc. to sell the system to potential buyers..

Thanks

Kurly

[Uncle Sam]

COGS Sub-S

If the training is part of the package being sold to customers, then the expenses attributable to providing those services should be part of the COGS.

[zeros]

Travel and Entertainment

I would think these types of expenses would be under expenses rather than COGS.

[taxcraft]

Cogs

I would put training materials which can be inventoried into COGS and all else as various expenses. Makes better sense to me.