Costco Executive Summary

Costco is a membership warehouse club that sells an extensive variety of merchandise in the United States. They have some products available to members only, but most of their products are available to the general public with an additional surcharge on certain products. Also, some popular products at Costco include hardware, electronics, furniture, and groceries. Furthermore, Costco also markets its own brand of merchandise under the name of Kirkland. Items under this brand name are more affordable and include a wide range of products such as bacon, beer, Greek yogurt, bread, and Colombian bean coffee.
Costco determines their cost of goods sold by using the warehouse business model. A warehouse business model is a group of companies working …show more content…
This can be done thru either these two methods: the gross method or the net method. The main difference between these two methods is how Costco will account for the purchases of their goods if a discount is an offer by the supplier to pay their goods early. For instance, in the gross method assumes that the company will not pay within the discount period and on the net method the company will pay during the discount period. So if a discount was an offer and the term is 2/10, n/30, this means that if Costco pays within 10 days of the invoice, Costco will get a 2 percent discount. Otherwise, the net amount is due within 30 …show more content…
This system allows them to make adjustment as the transaction occur. Also, they use barcode scanners at the check-out desk that are linked to the accounting information system of the company. This process provides the most updated count of the inventory; however you would think that this process would give accurate information but sometimes this can be misleading due to theft, waste, errors and so forth. It is recommended that Costco undertakes a physical count and adjust the inventory count to reflect what they actually have on their