COGS
Business & Finance abbreviation · Accounting
| Stands for | Cost of goods sold |
|---|---|
| Categories | Business & Finance |
COGS stands for Cost of goods sold, an accounting abbreviation.
Direct costs of producing or buying the goods a company sold during a period, including materials, direct labor and manufacturing overhead, but excluding selling and administrative expenses. Revenue minus COGS equals gross profit.
Example: Higher coffee bean prices pushed COGS up to 38 percent of revenue.
Usage notes
Pronounced "cogs." For a retailer, COGS equals beginning inventory plus purchases minus ending inventory, so the inventory method (FIFO, LIFO or weighted average) directly affects it. Service companies more often use "cost of revenue" or "cost of sales." Shifting costs between COGS and operating expenses changes gross margin without affecting operating profit.
Related abbreviations
More accounting abbreviations
- BV – Book value
- CECL – Current expected credit losses
- CFS – Cash flow statement
- CM – Contribution margin
- COA – Chart of accounts
- COGM – Cost of goods manufactured
- COS – Cost of sales
- COSO – Committee of Sponsoring Organizations of the Treadway Commission
- Cr – Credit
- CVP – Cost-volume-profit analysis
- CY – Calendar year
- D&A – Depreciation and amortization