Definition: What is Cost of Good Sold (COGS)?
Cost of Good Sold Shortly known as COGS. it is the managerial measurement. COGS is the amount which the company spent on labour, material, and overhead to manufacture or purchase the products, which were sold to customers during the year.
COGS does not use for the indication of that cost which used for the manufacturing of the products. It only indicates the direct cost for merchandise that was sold.
Cost of goods sold is used to measure the actual cost of producing merchandise that the customer purchased for a year.
For management, this is a very important calculation because through this management analyze that, how the company control the payroll and purchasing cost. Moreover, you can learn about Cost of Goods Sold (COGS) Formula.
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