Cost of goods sold (COGS) refer to the inventory costs of those goods a business has sold during a particular period. Costs are associated with particular goods using one of several formulas, including specific identification, first-in first-out (FIFO), or average cost. Costs include all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of goods made by the business include material, labor, and allocated overhead. The costs of those goods not yet sold are deferred as costs of inventory until the inventory is sold or written down in value.
Read more about Cost Of Goods Sold: Overview, Importance of Inventories, Cost of Goods For Resale, Cost of Goods Made By The Business, Identification Conventions, Example, Write-downs and Allowances, Alternative Views
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