Cost of Goods Sold (CoGS)

Cost of Goods Sold (CoGS)

COGS is the cost of those goods associated with product sales. The cost of goods sold includes the costs of all items that are directly or indirectly associated with the production or purchase of goods that have been sold. 

Cost of goods sold is the accumulated total of all costs used to create a product or service, which has been sold. These costs fall into the general sub-categories of direct labor, materials, and overhead. In a service business, the cost of goods sold is considered to be the labor, payroll taxes, and benefits of those people who generate billable hours (though the term may be changed to "cost of services"). In a retail or wholesale business, the cost of goods sold is likely to be merchandise that was bought from a manufacturer. 

In the beginning of a period, you start with $10m inventory.

Make $2m purchases during this period.

Ends with $9m inventory.

COGS will be $3m = (10 + 2 - 9) for this particular period

added a year ago

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- Gross Margin (GM)
- Cost of Goods Sold (CoGS)
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