Question

project type capitalized expense and update of contribution margin

  • 29 February 2024
  • 0 replies
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Hello,

 

I need your help on the following.

Some of our project have this type of setup

For each sales invoice,the system is calculating a preliminary cost of sales based on the contribution margin rate.

We noticed that if we update the contribution margin the new rate is applying only to next preliminary cost of sales calculated when new invoices are issued and there is no catch up calculation for the previous preliminary cost of sales.

 

Example :

Period 1

Contribution margin 25%

Invoice 1 for 500 000

preliminary COS : 375 000

 

Period 2 :

update the contribution margin to 15%

Invoice 2 for 400 000

preliminary COS : 340 000

 

YTD situation

Sales 900 000

COS 715 000

Margin : 185 000 (20.55%)  whereas we are expecting  only 135 000 (15%)

 

How to force the recalculation of the preliminary cost of sales generated on previous periods ?

 

Thank you

Alain 

 

 

 

 


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