ECONOMICS

Detailed explanation-1: -Cost of goods sold (COGS) is the direct cost of producing products sold by your business. Also referred to as “cost of sales, ” or “COGS report, ” COGS includes the cost of materials and labor directly related to the production and manufacturing of retail products.

Detailed explanation-2: -Product costs include the costs to manufacture products or to purchase products. If a product is unsold, the product costs will be reported as inventory on the balance sheet. When the product is sold, its cost is removed from inventory and will be included on the income statement as the cost of goods sold.

Detailed explanation-3: -Cost of goods sold (COGS) definition The cost of goods sold (GOGS) is the sum of all direct cost associated with making a product. It appears on an income statement and typically includes money spent on raw materials and labour. It does not include coss associated with marketing, sales or distribution.

Detailed explanation-4: -Examples of COGS include the cost of raw materials, direct labor costs, and manufacturing overhead costs. In a retail business, the cost of the products purchased for resale would be considered COGS. For a service business, COGS may include the cost of supplies or labor directly associated with providing the service.