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Cost of Sales
The total expense incurred to sell a product or service, including salaries, commissions, and other related costs.
Implications
Another term for Cost of Goods Sold (COGS), particularly used in service industries, referring to the direct costs associated with delivering services, including labor, materials, and overhead.
Example
Example: A consulting firm calculates its cost of sales by including the salaries of consultants, travel expenses, and other direct costs incurred while delivering services to clients.
Related Terms
Different from gross profit, which is revenue minus COGS, cost of sales focuses specifically on the direct costs involved in generating that revenue.
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