What is cost of goods sold for a small business? Your taxes are based on the Cost of Goods Sold. It's the total cost of getting your goods into the hands of your customer, and it's a deductible ...

For businesses that sell products, understanding how to calculate the Cost of Goods Sold (COGS) is essential. COGS encompasses all the expenses directly involved in creating or procuring the ...

The Bill of Materials (BOM) is just a subset of the Cost of Goods Sold (COGS), and if you aren’t selling your product for more than your COGS, you will lose money and go out of business.

From there, most of the items listed on the income statement relate to expenses, such as the cost of goods sold—namely expenses for materials—tied to the production and sale of goods and services.

Gross profit refers to the amount of revenue remaining after subtracting the cost of goods sold (COGS). Gross margin, on the other hand, expresses gross profit as a percentage of total revenue.