consept of COGS

[Guest]

Dear experts,

I have some confusion please justify the concept of COGS....

Regard:-

Virkam singh

AI Summary

Understanding Cost of Goods Sold: Key Components, Calculation Methods, and Fraud Risks in Business A forum participant sought clarification on the concept of Cost of Goods Sold (COGS). An expert explained that COGS includes all costs associated with producing a product or service sold, such as direct labor, materials, and overhead. In service businesses, it includes labor and related expenses. On income statements, COGS is subtracted from revenue to determine gross margin. The expert detailed how COGS is calculated under periodic and perpetual inventory systems and discussed the impact of FIFO and LIFO inventory costing methods. Additionally, potential fraudulent alterations of COGS were highlighted, with links provided for further reading.