COGS stands for Cost of goods sold.
It is the amount of money spent by a company on its labor, materials, and overheads to manufacture/purchase products of the goods that are sold to customers during the year.
For a Manufacturing unit:
The Cost of goods sold = Total cost of production + Opening stock of the Finished goods – Closing stock of the finished goods.
For a retailer/reseller:
The Cost of Goods Sold = Opening Stock + Purchase – Closing Stock
COGS is an important part of a Cost Sheet.
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