™ can help. We are expert bookkeepers that can help your small business with its bookkeeping needs. Here’s a short explanation of what Cost of Goods Sold (COGS) means. If we can be of more help explaining what Cost of Goods Sold (COGS) is or if we can help you with any of your small business bookkeeping needs, give us a call at 888-552-6657 888-55Books)™ provides a way for small businesses to have outsourced bookkeeping at a significant savings. We provide our clients with pre-printed envelopes. You stuff the envelopes and our expert team does the rest with detailed reports and timely compliance support. Not to mention, you now have a team of experts at your disposal should you have questions or last-minute needs. Let’s start with answering what Cost of Goods Sold (COGS) means:

To gain a better understanding of a business’ success for a given period, accountants often calculate the cost of goods sold directly on the income statement.

The cost of goods sold includes all materials used, plus the labor used directly, in the creation of a product.

For example, the cost of goods sold of a baker would include the flour, grains, and labor. By comparing cost of goods sold to revenue, a manager is able to gain valuable understanding for break-even and growth analysis.

Revenue less Cost of Goods Sold equals Gross Margin.

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