Accounting & Tax

Cost of Goods Sold (COGS)

The cost of goods sold represents the direct costs incurred by a company in producing or delivering its products or services. It includes expenses such as raw materials, manufacturing costs, and direct labor.

Arbo Team
Jul 19, 2023

What it is: The cost of goods sold represents the direct costs incurred by a company in producing or delivering its products or services, including expenses like raw materials, manufacturing costs, and direct labor.

Why it is important: COGS is essential in determining a company's profitability and helps assess the efficiency of its operations and pricing strategies.

How to use it in startups: Startups calculate COGS to determine gross profit and evaluate the cost-effectiveness of their product or service offerings. By monitoring COGS, startups can identify opportunities for cost reduction, pricing adjustments, and improving overall profitability.
Accounting & Tax

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