Cost of Goods Sold

Cost of Goods Sold measures the expense a company incurred in order to acquire, manufacture or create a sellable product. It includes the purchase price of the raw materials as well as the expenses of turning it into a sellable product.

Contents

Calculation

Cost of Goods Sold
=
 Direct Materials + Direct Labor + Overhead × 100 % Revenue

where

• Direct Materials = Total annual cost of materials to generate the revenue
• Direct Labor = Total annual personnel cost to generate the revenue
• Revenue = Total annual revenue from sales of products and services

Unit of measure: %

Importance

A lower number of days indicate better control of the costs to source and make sellable products/services.

Alternative names include: Cost of Revenue and Cost of Sales. Statement of Comprehensive Income

Community Importance Rating:
2.00
(one vote)

Hierarchy

IDNameLevelx
CO1Supply Chain Costs1CO1
CO11Cost of Goods Sold2CO11
CO111Direct Material Costs3CO111
CO112Direct Labor Costs3CO112

Process(es)

IDNameLevelx
P1Plan Supply Chain Operations2P1
P101Gather Demand Forecast3P101
P2Plan Source2P2
P203Calculate Sourcing Plan3P203
P3Plan Make2P3
P303Calculate Production Plan3P303
S006Negotiate3S006
S1Source-to-Replenish2S1
S10201Schedule Appointment4S10201
S10202Check-In4S10202
S10203Queue Activities4S10203
S10204Inspect Vehicle4S10204
S10205Weigh-In4S10205
S104Inspect3S104
S2Source-to-Order2S2
S201Create Order3S201
S205Inspect3S205
S3Source-to-Engineering-Order2S3
S302Negotiate & Award3S302
S303Create Order3S303
S306Inspect3S306
M1Make-to-Stock2M1
M2Make-to-Order2M2
M204Produce3M204
M3Make-To-Engineering-Order2M3
M302Complete Order Engineering3M302
M305Produce3M305
M309Transfer3M309
M4Re-Make2M4
M401Create Work Order3M401
M402Schedule Work Orders3M402
M405Issue Material3M405
M410Transfer3M410
D203Route & Schedule Order3D203
D304Schedule Project Resources3D304

Term(s)

IDNameClearx
EPSEarnings per ShareEPS
IFRSInternational Financial Reporting StandardsIFRS
CSCIStatement of Comprehensive IncomeCSCI
SCFSupply Chain FinanceSCF
Cost of Goods Sold Supply Chain Costs 41100 2 {{{keywords}}} {{{description}}}