In manufacturing, how are all costs directly related to production-including raw materials, labour, and factory overhead-classified?

Question

Quizplus · Accepted Answer

All costs directly related to production, such as raw materials, labor, and factory overhead, are classified as cost of goods sold (COGS). COGS is the cost incurred to produce or acquire products that are sold by a company. It includes direct costs (such as raw materials and labor) as well as indirect costs (such as factory overhead and depreciation). COGS is deducted from revenue to calculate a company's gross profit.

In Manufacturing, How Are All Costs Directly Related to Production-Including