COGS (Cost of Goods Sold)

Beginner 💰 Finance / Accounting

Definition

Direct costs of producing goods you sell—labor, materials, and the despair of manufacturing.

Example Usage

Our COGS increased this quarter due to higher raw material prices.

Origin

Fundamental accounting principle from cost accounting development

Fun Fact

COGS is tax-deductible, making it the accountant's favorite number to debate

Source: Standard income statement terminology

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