Cost of goods sold definition

Cost of goods sold (COGS) is the group of line-items on the Profit and Loss (P&L) statement that represent the direct expense of goods and services required to produce the sales revenue identified in the same statement.

COGS include, but may not be limited to:

- raw materials and other tangible items purchased
- items pulled from inventory
- payroll expense to manufacture (assemble, etc.) products and services sold
- freight.

Search also for gross profit, gross profit margin and above the line.