Cost of Goods Sold - What is included in cost of goods sold?

Q: What is included in cost of goods sold?

Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. This amount includes the cost of the materials and labor directly used to create the good. It excludes indirect expenses, such as distribution costs and sales force costs.

Answer

A business's direct expenses in making the products it sells are known as its cost of goods sold (COGS). All of the direct costs of the goods' production, including materials and labor, are included in this sum. It doesn't account for indirect expenditures like sales force and distribution charges.

Cost of Goods Sold - What is included in cost of goods sold?

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