What is 'COGS'?

Cost of goods sold (COGS) is defined as the direct costs attributable to the production of the goods sold in a company. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

| Term of the Day Cost of Goods Sold – COGS Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. This 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. Cost of goods sold is also referred to as "cost of sales." Read More » Related to "Cost of Goods Sold – COGS" How Are Cost of Goods Sold and Cost of Sales Different? Cost of goods sold and cost of sales both represent the direct costs involved in production. However, some companies use one term rather than the other. Read More » Industries That Cannot Claim Cost of Goods Sold Discover which types of businesses are not allowed to list cost of goods sold on their income statement or claim their COGS for a tax deduction. Read More » Inventory Valuation — LIFO vs. FIFO We describe how to calculate the inventory item on the balance sheet using FIFO, LIFO, and average cost methods, and consider the results of each. Read More » Related Definitions Income Statement An income statement is one of the three major financial statements that reports a company's financial performance over a specific accounting period. Read More » Gross Profit Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of providing its services. Read More » Gross Margin The gross margin represents the amount of total sales revenue that the company retains after incurring the direct costs associated with producing the goods and services sold by the company. Read More » Cost of Revenue The cost of revenue is the total cost of manufacturing and delivering a product or service, and is found in a company's income statement. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC, All Rights Reserved | Privacy Policy