Calculating COGS (1 Viewer)

[truly-in-bliss]

Originally posted by yaya
truly-in-bliss
i dont agree with u
COGS it simply workin out da expense as ppl said before, its not workin out break even make it profit or loss.
it simply tell s how much u sold if follow
-=MLhtʻ=- method.
COGS=0 for my assumption as i read others says it just mean u sold $o in goods value.
plz correct me if im wrong

i already said i was mistaken b4 and malachite's explanation is clearer and correct....

 

[BofS]

No one on this thread has really defined COGS well (however the calculations are spot on). It represents the VARIABLE COSTS experienced by the business. This means as output goes up (goods sold) so will the cost of selling those goods. It shows the raw material needed as well as other expenses that are dependent upon the output. This is apposed to the fixed costs (such as insurance or rent etc.) which are there regardless (these are shown in the expenses section of the profit statement.