COGS (Cost Of Goods Sold)

Cost of Goods Sold (COGS) is a business term used to describe the total cost associated with manufacturing, producing, and selling products or services. It is calculated by adding up the costs of materials, labor, and overhead expenses associated with purchasing, processing, and/or producing goods that are sold to customers. This number helps companies better understand their profitability and cash flow in order to make strategic decisions when it comes to pricing, production levels, and other important aspects of their operations.