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[[Cost of goods sold]] (alternatively known as [[cost of sales]] or by its acronym; hereinafter, [[COGS]]) is a monetary value of costs that are associated with a particular sale or group of sales. [[COGS]] may be calculated using one or more [[#Methods of calculation|method]]s and include [[historical cost]]s, freight charges, storage costs, associated [[direct labor]], production expenses, and [[depreciation]].


==Definitions==
According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
:[[Cost of goods sold]]. Total cost of the goods which were sold to customers.

==Components==
Costs of the sold products, used [[raw material]]s, and allocated expenses may include from one to all of the following:
*[[Historical cost]]s.
*Freight, shipping, and/or other service charges.
*The cost of storage and handling.
*Direct labor costs for workers who produced the sold products.
*Production expenses.
*[[Depreciation]].

==Methods used to value inventory==
::''Main wikipage: [[Inventory valuing]]''

*'''[[Specific invoice method]]'''. Valuing of inventory where each item is identified with a specific invoice.
*'''[[FIFO]]''' ([[first-in, first-out method]]) Valuing of inventory assuming that the company sells the first goods received in the store.
*'''[[LIFO]]''' ([[last-in, first-out method]]). Valuing of inventory with the assumption the last goods received in the store are the first to be sold.
*'''[[Weighted-average method]]'''. Valuing of inventory where each item is assigned the same unit cost. This unit cost is found by dividing the cost of goods available for sale by the total number of units for sale.

==Related concepts==
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].

==Related lectures==
*[[Bookkeeping Quarter]]. 

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