COGS represents the expenses incurred to produce products or services. Includes direct labor and materials for production. Excludes indirect costs like utilities and marketing expenses
Gross profit is revenue minus cost of goods sold (COGS). Calculated as (Revenue - COGS) / Revenue x 100. Excludes fixed costs like rent and insurance
COGS represents direct costs incurred while selling goods or services. Calculated as Beginning Inventory + Current Purchases - Ending Inventory. Must be recognized in same period as revenue under accrual accounting
COGS represents total investment in producing products. Includes labor, raw materials, and direct production costs. Direct costs have direct line to product sale. Indirect costs like rent and utilities aren't included
Both margin and markup are parts of the same transaction. Margin shows profit as percentage of sales price. Markup shows profit as percentage of cost price
Overhead is an ongoing business expense that cannot be directly traced to revenue. Overheads support business operations but don't directly generate profits. Overheads are included in income statement except direct labor and materials