Accounting

    COGS (Cost of Goods Sold)

    Direct costs of producing the goods or services you sold.

    Definition

    Includes parts, materials, and direct labor. Excludes overhead like rent and admin salary. Revenue − COGS = Gross Profit.

    Related terms

    Revenue

    Total money earned from sales before any expenses are subtracted.

    Gross margin

    Profit as a percentage of the sell price (price − cost) ÷ price.

    Overhead

    Indirect costs of running the business — rent, insurance, software, admin pay.