Cost Of Sales Vs Cost Of Goods Sold

Cost of Sales (also known as Cost of Goods Sold or COGS) and Cost of Goods Sold (also known as Cost of Sales or COGS) are two terms that are commonly used in business to refer to the expenses associated with producing a product or providing a service.

COGS is the total cost required to acquire the raw materials and labor needed to manufacture the product, or acquire the services needed to provide the service. This includes all direct costs associated with acquiring and handling material, such as shipping and storage fees.

Cost of Sales, on the other hand, refers to the additional costs associated with actually selling the product or service. These costs include advertising, marketing, promotions and sales staff salaries. Cost of Sales is typically a higher number than Cost of Goods Sold, since it represents all of the costs required to bring products to market.