MANAGEMENT

Detailed explanation-1: -COGS counts as a business expense and affects how much profit a company makes on its products. Cost of goods sold is found on a business’s income statement, one of the top financial reports in accounting. An income statement reports income for a certain accounting period, such as a year, quarter or month.

Detailed explanation-2: -Cost of goods sold (COGS) definition 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. Cost of goods sold (COGS) is the direct cost of making a company’s products.

Detailed explanation-3: -COGS, sometimes called “cost of sales, ” is reported on a company’s income statement, right beneath the revenue line.

Detailed explanation-4: -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. COGS excludes indirect costs, such as distribution and marketing.

Detailed explanation-5: -Key Takeaways COGS excludes indirect costs such as overhead and sales & marketing. COGS is deducted from revenues (sales) in order to calculate gross profit and gross margin. Higher COGS results in lower margins.