Definition: Cost of Goods Sold (COGS) - Examples & Advice | Bolder Money

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Cost of Goods Sold (COGS)Cost of Goods Sold (COGS)

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Definition

The direct costs attributable to the production of goods sold by a company, including materials and labor.

What to consider

Use it to decide if a major purchase or investment is really worth it.
Compare the upfront cost to the potential long-term benefits.
Keep it simple—just weigh the pros and cons.

Real world scenarios

Running her bakery, Lisa tracked the cost of goods sold (COGS) to ensure that her pricing strategy covered the expenses of ingredients and labor.

Related terms

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