Cost of Goods Sold COGS Formula Calculation Definition Example
The COGS calculation process allows you to deduct all the costs of the products you sell, whether you manufacture them or buy and re-sell them. List all costs, including cost of labor, cost of materials and supplies, and other costs. Goods that were manufactured or purchased first are the first ones to be sold. With FIFO inventory, it means that your business will have to sell first the least-expensive products. Understanding these components helps businesses accurately calculate COGS.
In addition, the …