COGS is a cost measure that applies to companies that manufacture tangible products; COGS cannot be computed for firms that deal exclusively in a service-based revenue model.

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COGS, or Cost of Goods Sold, primarily applies to companies that manufacture or sell tangible products, but service-based companies can also have COGS, which in their case might include direct costs related to delivering a service, such as labor, materials, and overhead directly tied to service provision.

COGS Is a Cost Measure That Applies to Companies That