Cost of Goods Sold
Also called: COGS, cost of sales, cost of revenue
Cost of goods sold is the direct cost of producing what you actually sold in the period — materials, direct labour, manufacturing overhead. It excludes selling and administrative costs, which sit below gross profit. What a company chooses to put in COGS versus operating expenses moves its gross margin without changing profit at all, which is why gross margins are only comparable within an industry.
Formula
COGS = Opening inventory + Purchases − Closing inventory
Where this is taught
Definitions are the trailer. These free levels turn Cost of Goods Sold into something you play — one bite-size lesson, with worked examples, a quiz and XP.