Cost of Goods Sold (COGS)

Cost of Goods Sold (COGS)

Also referred to as cost per unit or cost of sales, it involves the direct expenses a company incurs in manufacturing or purchasing the products it sells, including material and labor costs.

It excludes indirect costs related to selling and distribution expenses.

Related Terms

Incremental Revenue

Represents the additional profit generated by a business as a result of increased sales volume. It

Merchandising

It includes the comprehensive strategies and practices retailers employ to promote and sell products to customers