Effect Of Financial Factors On Your Business
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This is probably the most important cost to be recorded in your account book. Cost of goods sold (COGS) simply refers to the direct costs that can be attributed to the production of the goods sold in a company. This amount includes the cost of the materials used in creating the good along with the direct labour costs used to produce the good. It excludes indirect expenses such as distribution costs and sales force costs. For example, the COGS for an automaker would include the material costs for the parts that go into making the car plus the labour costs used to put the car together.
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