COGS Do Not Include Administrative Costs

Administrative and marketing expenses, which cannot be directly attributed to the manufacture of products, are not included in COGS.

Rather those expenses are included under Selling, General and Administrative Expenses (discussed in the following section).

6. COGS

Exercise Q1: Which of the following examples constitute Cost of Goods Sold? Cost of steel for an auto manufacturer Cost of a cashier at a supermarket Cost of computers used by secretaries at a tire plant Cost of computers acquired by a merchant for resale to the public Cost of research and development at a pharmaceutical company

6. COGS

Solution Q1: Which of the following examples constitute Cost of Goods Sold? Cost of steel for an auto manufacturer Cost of a cashier at a supermarket Cost of computers used by secretaries at a tire plant Cost of computers acquired by a merchant for resale to the public Cost of research and development at a pharmaceutical company