![]() Other items, such as depreciation, may appear on COGS, but that will vary by industry.ĭepreciation will sometimes be recorded under Operating expenses (SG&A), but it should ideally be reported under Other income/Expenses after Operating income or EBITDA. COGS includes labour that is directly tied to production, such as production worker wages, whereas operating expenses include labour or salaries and wages not related to production, such as office and management salaries. Note that some items-such as labour-appear under both COGS and operating expenses. Some businesses report both COGS and cost of sales separately if they make products and are involved in retailing or wholesaling. ![]() For this reason, COGS is sometimes said to be a variable cost, while operating expenses are described as fixed costs.ĬOGS is only used by companies that make products, including those in the manufacturing, technology, aerospace, transportation, telecommunications, agricultural and food, and construction sectors.Ĭompanies that don’t make a product-for example, retailers and wholesalers-use the term cost of sales instead to refer to direct costs. This contrasts with indirect expenses, referred to as operating expenses (or SG&A, which is short for selling, general and administrative expenses), which remain the same regardless of the amount produced. Growth & Transition Capital financing solutionsĬOGS represents all costs associated with making the products that were sold during the period covered by an income statement.ĬOGS goes up or down based on the volume of production. Kauffman Fellows Program Partial Scholarship Venture Capital Catalyst Initiative (VCCI) ![]() Industrial, Clean and Energy Technology (ICE) Venture Fund ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |