The “Total purchase during the year” is how much inventory you bought in the year. For example, if you have a business that sells hockey sticks, and during the year you bought 1000 sticks at $20 each, then your Total purchase during the year would be $20,000.
I have a snacks manufacturing business - I purchase everything I need to make the product, package and market it. How would I figure this out for this question? I also am wondering what other costs is referring to. Thanks so much!
If you manufacture things, then your purchase would be the raw materials that you use to make those things. In your case that would be things like food ingredients, packaging like muffin cups, etc...
Would this include my labels, all packaging materials?
For the "other expenses," would this be things that aren't part of the actual product like the website, designer for the brand, photoshoots etc? I have a lot of start-up costs, and I want to make sure I am entering them where I need to be.
In Cost of Goods Sold, you are dealing with things that are specific to the product. So, for example, if you make cookies, you would include the box that the cookies come in and the label you put on the box that says what kind of cookie is inside. But you would not include the boxes and labels that you use to ship the cookies to customers – there’s a separate place for that. The website might go under advertising expense, as would the costs of a brand designer.