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component in cogs

Former Member
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cogs is the cost to make a goods. when the goods is done meaning whatever cost there after should not be included.

but may i know why cost like selling expenses, distribution cost, freight, commission also included? this is baffled me.



Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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COGM is the cost of making goods but not COGS.

COGS includes COGM+all other incedental expenses like sales expenses and other Admin expenses. It is good practice to releate the total material cost and all other related incendtal expenses against the revenue to arrive the profit.


Sudhakar Reddy

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