Cost of Goods Sold

Inventory costs of those goods a business has sold during a particular period. Costs are associated with particular goods using one of several formulas, including specific identification, first-in first-out (FIFO i.e. first purchased is first sold), or average cost. Costs include all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and saleable condition. Costs of goods sold by the business include material, labor, and allocated overhead.