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Cost of
Revenue, Cost of Sales, Cost of Goods Sold (COGS)
Cost of goods sold (COGS for short) is the expense a company incurred in
order to manufacture, create, or sell a product. It includes the purchase
price of the raw material as well as the expenses of turning it into a product.
Cost of goods sold (COGS) is also known as cost of revenue or cost of sales.
Going back
to our Pizza Parlor example, your cost of goods sold (COGS) include the amount of money
you spent purchasing items such as flour and tomato sauce.
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