Cost Of Goods Sold: A Primer - Deepstash

Cost Of Goods Sold: A Primer

As a company selling products, you need to know the costs of creating those products. That’s where the cost of goods sold (COGS) formula comes in. Beyond calculating the costs to produce a good, the COGS formula can also unveil profits for an accounting period, if price changes are necessary, or whether you need to cut down on production costs.

Whether you fancy yourself as a business owner or a consumer or both, understanding how to calculate the cost of goods sold can help you feel more informed about the products you’re purchasing — or producing.

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Cracking the code of the Income Statement

It consists of three main categories:

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