The cost of goods sold is a variable cost for a retailer, but contains a mixture of variable and fixed production costs for manufacturers.

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The cost of goods sold (COGS) is the cost of producing or purchasing the products that are sold by a business. For a retailer, the COGS is a variable cost because it varies based on the quantity of goods sold. However, for manufacturers, the COGS contains a mixture of variable and fixed production costs such as labor, materials, and overhead costs.

The Cost of Goods Sold Is a Variable Cost for a Retailer