Cost of Goods Sold (COGS) Definition

Cost of Goods Sold (COGS) Definition:

  • Cost of goods sold, COGS, or “cost of sales”, includes the direct costs attributable to the production of the goods sold by a company.
  • Figure representing the cost of buying raw materials and producing finished goods.
  • The amount paid for the goods sold during an accounting period.
  • The total cost of purchasing raw materials and manufacturing finished goods. Equal to the beginning inventory plus the cost of goods purchased during some period minus the ending inventory.
  • Determined for the period by counting the merchandise left at the end of the period (physical inventory) and subtracting its cost from the total cost of merchandise available for sale.
  • the total cost to the business of the goods sold during an accounting period. In its simplest form this is the sum of the opening stock plus all purchases less the closing stock.

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