Cost of Goods Sold Calculator
In merchandising companies, CoGS is similar with purchasing price from those companies to their suppliers. But, in manufacturing companies, COGS is the costs that go into creating the products that a company sells; therefore, the only costs included in the measure are those that are directly tied to the production of the products.
For example, the COGS for an mobile phone maker would include the material costs for the parts that go into making the mobile phone along with the labor costs used to put the mobile phone together. The cost of sending the mobile phones to buyers and the cost of the labor used to sell it would be excluded. That is the example of the basic interpretation of COGS. The accounts included in the COGS calculation will differ from one type of business to another.