What Is Cost Of Goods Sold And Why Is It Important

cost of goods sold  What Is Included in Cost of Goods Sold? COGS includes all direct costs incurred to create the products a company offers Most of these are the Cost of Goods Sold is the direct cost of a product to a distributor, manufacturer, or retailer Sales revenue minus cost of goods

Key Takeaways · The cost of goods sold includes all expenditures and expenses that are directly related to producing items · Sales and marketing Why is COGS important? The Cost of Goods Sold metric is essential for evaluating and comparing the profitability of different products or lines of business

The cost of goods sold formula is calculated by adding purchases for the period to the beginning inventory and subtracting the ending inventory for the period  Cost of Goods Sold represents costs that are directly related to the manufacturing and distribution of products