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Cost of goods sold, or COGS, includes the direct costs required to produce or deliver revenue.
Cost of goods sold, or COGS, includes the direct costs required to produce or deliver a product or service. It is the cost base used in gross margin.
Gross margin = (Revenue - COGS) / Revenue
COGS may include materials, production labor, hosting, support delivery, payment processing, or direct service delivery costs depending on the business model. Compare with gross margin by industry.
Related calculator: Cost of Goods Sold Calculator.