COGS

(noun)

COGS (cost of goods sold) is the inventory costs of those goods a business has sold during a particular period.

Related Terms

Examples of COGS in the following topics:

  • Cost Flow Assumptions

    • FIFO assigns first costs incurred to COGS (cost of goods sold) on the income statement.
    • Assigns first costs incurred to COGS (cost of goods sold) on the income statement
    • LIFO and weighted average cost flow assumptions may yield different end inventories and COGS in a perpetual inventory system than in a periodic inventory system due to the timing of the calculations.

  • Lower of Cost or Market

    • Any loss resulting from the decline in the value of inventory is charged to cost of goods sold (COGS) if non-material, or loss on the reduction of inventory to LCM if material.

  • Dollar-Value LIFO

    • However, because it does occur and thus costs change over time, the dollar-value method presents data that show an increased cost of goods sold (COGS) when prices are rising, and a lower net income.

  • Inventory Turnover Ratio

    • The equation forinventory turnover is the cost of goods sold (COGS) divided by the average inventory.

  • Impacts of Costing Methods on Financial Statements

    • This method is the most easy to calculate; it takes a weighted average of all units available for sale during the accounting period and then uses that average cost to determine the value of COGS and ending inventory.

  • Average Cost Method

    • The Current Goods Available for Sale is deducted by the amount of goods sold (COGS), and the Cost of Current Inventory is deducted by the amount of goods sold times the latest (before this sale) Current Cost per Unit on Goods.

  • Preparation of the Income Statement

    • Cost of Goods Sold (COGS)/Cost of Sales represents the direct costs attributable to goods produced and sold by a business (manufacturing or merchandising).