Question for those with accounting/finance backgrounds. We sell kits on Shopify and when the orders comes in, the kit sku is tagged using custom segments for reporting. With this approach, revenue is reported using the custom segment for the kit sku but COGS is reported using the component sku's custom segments. How do organizations calculate kit profitability in this scenario?

For kit profitability, you'll need to match the revenue recognition method with COGS tracking. Either roll up component segments to the kit level for COGS reporting, or break down revenue to component level for consistency. Most teams build custom reports that group both revenue and COGS by the kit SKU regardless of underlying segment assignments.

Thanks for the response!