Have a question that is for sure 100% theoretical and not based on anything that has happened or will happen in the real world for any business.
So when your business sells a physical product, you have some cost of manufacturing that product and getting it into your inventory, and I'll call that a "cost of goods sold". Then when you sell it, you have a revenue amount, and your revenue minus your cost of good sold (and other direct costs) is your gross margin for that sale. I think that's about correct.
But when happens when you sell something that was a capital asset of the company, which now has a depreciated value? Do you just basically use that current depreciated book value as your cost of goods sold, or is it treated differently? Assuming of course that this capital asset is fully owned by the company, and there's no debt or liability associated with it. What would you call the "gross margin" on a sale of a capital asset? Is that the right term?