A certified public accountant is one who has earned a license in his or her state that attests to a high degree of skill, training, and experience. In addition to passing an accounting examination, a candidate must have the proper business experience, education, and moral character in order to qualify for the license. The letters CPA are commonly used and generally recognized to be the abbreviation for the title Certified Public Accountant.
For manufactured goods, direct costs also include raw materials, labor, and production expenses. Other costs, such as transportation and advertising, are not included in COGS. To calculate COGS, beginning inventory is added to current period purchases, and ending inventory is then deducted.
Labor expense is typically the highest cost of any operation. Therefore, containing or reducing your labor cost by a few percentage points can mean big bucks in profitability. The good news is that itâs really the easiest cost center to manage. Labor cost is tracked and managed as a percentage of your total sales. A typical restaurant will run at a labor cost of approximately 30 percent of total revenue. Comparably, a bar or nightclub can operate at a considerably lower percentage â about 18 â 24 percent of revenue, based upon the type of operation.