varekostnad

Varekostnad is a term used in Swedish accounting to describe the total cost of goods purchased for resale or for use in production. It represents the cost basis for inventory and is a key element in calculating gross margin. Varekostnad typically includes the purchase price of the goods plus all costs necessary to bring the goods to their present location and condition. Common components are inbound freight, insurance during transit, customs duties and taxes, handling charges, and packaging. Some costs such as testing directly linked to acquiring the inventory can also be included; indirect overhead not directly attributable to the purchase is typically treated separately, although some costing methods allocate a portion of overhead to inventory.

Discounts, rebates, and other price reductions reduce varekostnad, while returns or allowances decrease the recorded cost of the purchased goods. The concept is closely tied to inventory valuation: inventories are usually carried at the lower of cost (varekostnad) and net realizable value under relevant accounting standards. When inventory is sold, varekostnad becomes part of the cost of goods sold.

Example: A company purchases 100 units at 50 SEK each (purchase price 5,000 SEK). Inbound freight is 200 SEK, insurance 50 SEK, and packaging 30 SEK. A supplier discount of 200 SEK is received. The varekostnad would be 5,000 + 200 + 50 + 30 − 200 = 5,080 SEK for the total inventory cost, to be allocated per unit as needed.

See also: cost of goods sold, inventory valuation, cost accounting.