Cost of Goods Sold (COGS) refers to the cost to a business of making product or service. COGS differ from one industry to another. COGS appear on the
income statement and can be deducted from revenue to calculate a company's gross margin. The cost of goods sold includes net direct inventory cost and
labour expense, factory overhead, office and administration overhead but does not includes indirect cost related to selling and distribution overhead.

For manufacturing industry, COGS refers to buying of raw material & expense for manufacturing finished goods. For retailers, it is the cost of
obtaining or buying the products sold to customer. If the company is in a service industry, COGS is the cost of the service it offers.