COGS is a direct cost category that includes all expenses incurred to produce and sell a company’s products. It is subtracted from revenue to determine gross margin and profitability. The relationship between inventory and COGS varies depending on the type of business. Cost of goods sold (COGS) is a component of a company’s inventory value. […]
A cost of goods sold statement tracks inventory costs by starting with beginning inventory, adding purchases and expenses, subtracting ending inventory, and accounting for direct materials, labor, factory overhead, work in progress, and finished inventory. Non-manufacturing companies add inventory purchases and expenses related to selling inventory, while manufacturing companies also include direct materials, labor, and […]
