Cost of Goods Sold

Cost Of Goods Sold is the direct costs owing to the production in the goods sold by a company. This amount includes the cost on the materials used in creating the good and the direct labor costs helpful to produce. It excludes indirect expenses including distribution costs and sales team costs. COGS appears on the income statement which enable it to be deducted through revenue to calculate a company’s gross margin. Also referred to as “cost of income.”