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Jul 10, 2017 at 07:00 AM

Finance--What is Cost of Goods Sold (COGS) & How To Calculate It

By Alexandra Trujillo
Finance--What is Cost of Goods Sold (COGS) & How To Calculate It

By 

Cost of goods sold (COGS) is an accumulation of the direct costs that went into the goods sold by your company. This includes the cost of any materials used in production as well as the cost of labor needed to produce the good. It does not include indirect expenses such as distribution costs and marketing costs.

How to Calculate Cost of Goods Sold

While you will most likely need a CPA or tax professional to calculate cost of goods sold, you can still do a basic calculation to see how the work is done and determine the information you will give to your CPA.

Remember that the only costs you will be including in the measure for your cost of goods sold are the ones that are directly tied into the production costs of your goods or services.

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Posted in Small Business Financing.







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