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1. • CommentAuthoramber.cornina
   • CommentTimeApr 4th 2008

    
   If my company builds and sells websites can I apply the wages for the web designers to Cost Of Goods Sold (the goods being the websites or other production projects that they build)? Of couse there is the wages expence account but I want our cost of production (designers wages) to be subtracted from Revenues to get to Gross Profit on the Income statement. Someone told me that wages have to be reported as an expence if they are my employees. My reasoning comes from the fact that direct labor hours to manufacture a product (in my case websites) are included with cost of goods sold along with manufacturing overhead and direct materials.
2. • CommentAuthormind_hunter
   • CommentTimeApr 5th 2008

    
   basically, all cost incurred in developing computer software for sale or lease are considered as research and development cost (intangible asset)and should be capitalized upon its completion.eg, salaries of programmer, professional fees paid to consultant for that particular project, subcription made in relation to developing of sofware. The main reason for this, so you can identify how much your gross profit for that particular product. you only charge to expense accounts are those that can't be identifiable to cost of developing the software. eg. salaries of your secretary, rental of office space, water and electicity bill.

   Thankful People: amber.cornina, borealis