USA Should Coupons be Included as part of Operation Cost

[ehapylucky05]

Hi, I have a question, let's use a hypothetical example below:

1. Gross revenue = $100
2. Coupon = $10
4. Net revenue = $90 (Gross Revenue - Coupon)
3. Google Ads Spend = $12

When calculating the Cost of Operation, in my boss' term, how much money we spend to make net revenue, what's the correct formula to calculate this?

This is how I calculate it: ($100 - $90) / $12

But, this is how my boss calculate it: $90 / ($12+$10)

My argument was, the $10 already deducted from the Net Revenue, if you still add it to the denominator (my boss calculation), isn't that double counting? Furthermore, if you didn't sell the products, it's going to take up the storage space, those are additional cost too. I am not too sure about how to calculate this properly, really appreciate your help.

 

[Asha Kanta Sharma]

If you have already deducted the Coupon $10 it will be wrong to add it to the denominator.