the price which is paid for the stock items. It’s used for tax and accounting purposes.

COGS identifies the direct costs caused by the production of the products sold in a business company. This amount includes the cost of the materials used in making the good along with the direct labour costs used to produce the product. It excludes indirect expenditures, such as distribution expenses and sales force costs.

The Formula for COGS Is
COGS=Beginning Inventory + Purchases during the period − Ending inventory