Cogs Business is an official business term that means an organization’s overhead costs and expenses. These costs include fixed expenses such as rent, depreciation, salaries, benefits, and insurance premiums. Variable costs like advertising, raw materials, inventory costs, and utility bills are also part of cogs. Cogs can have a major impact on a company’s profitability since they are unavoidable costs that cannot be reduced without significantly affecting the output of the business. Understanding cogs is essential for businesses to maximize their profits and to evaluate the efficiency of their processes.