Difference between revisions of "Cost of goods sold"
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| − | [[Cost of goods sold]] is | + | [[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]]. |
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According to [[College Accounting: A Practical Approach by Slater (13th edition)]], | 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. | :[[Cost of goods sold]]. Total cost of the goods which were sold to customers. | ||
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| + | ==Methods of calculation== | ||
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| + | ==Components== | ||
| + | The cost of products or raw materials, including freight or shipping charges; | ||
| + | The cost of storing products the business sells; | ||
| + | Direct labor costs for workers who produce the products; and | ||
| + | Factory overhead expenses. | ||
| + | Depreciation | ||
| + | |||
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==Related concepts== | ==Related concepts== | ||
Revision as of 15:57, 21 December 2018
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 and include historical costs, freight charges, storage costs, associated direct labor, production expenses, and depreciation.
Contents
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.
Methods of calculation
Components
The cost of products or raw materials, including freight or shipping charges; The cost of storing products the business sells; Direct labor costs for workers who produce the products; and Factory overhead expenses. Depreciation
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. 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.
