Cost of Goods Sold

The direct costs of producing the goods a business sold in a period.

Four parts make up the standard list: raw materials, the supplies consumed while producing, pay and benefits for the people doing the producing, and what it takes to run the plant. Components inside COGS can themselves be fixed or variable.

Often confused with

Cost of Sales: COGS is the term for businesses that produce goods; cost of sales is the term for service businesses.

Taught in

3.4 Business Expenses
3.6 The Income Statement

Cost of Goods Sold

Often confused with

Taught in

See also