Cost of products sold
Encyclopedia
Cost of products sold is the expense incurred by a company
to sell a product
. It includes raw
and packing
material costs, production costs (labor
, utilities, etc.), and certain freight costs.
Company
A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...
to sell a product
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
. It includes raw
Raw material
A raw material or feedstock is the basic material from which a product is manufactured or made, frequently used with an extended meaning. For example, the term is used to denote material that came from nature and is in an unprocessed or minimally processed state. Latex, iron ore, logs, and crude...
and packing
Packing
Packing may refer to:In Mechanical engineering:* Packing, also known as an O-ring or other type of Seal , a term for a sealing materialIn Chemical engineering:* Structured packing, i.e...
material costs, production costs (labor
Manual labour
Manual labour , manual or manual work is physical work done by people, most especially in contrast to that done by machines, and also to that done by working animals...
, utilities, etc.), and certain freight costs.