Cost of goods sold:
A) is considered a selling expense.
B) is the direct cost of the product to the company.
C) is classified as revenue on the income statement.
D) is the same as gross profit.

Question

Quizplus · Accepted Answer

Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. This includes the cost of materials, labor, and manufacturing overhead. It is not considered a selling expense, but rather a key component in calculating gross profit on the income statement.

Cost of Goods Sold