Why is cost of goods sold not an operating expense?

Why is cost of goods sold not an operating expense?

Operating expenses might also be referred to as SG&A (sales, general, and administrative expenses). Essentially, an operational expense is the opposite of COGS. It includes all of the expenses that don’t fall under the cost of goods sold category and aren’t directly tied to the production of the good or service.

What costs are included in operating costs?

Common operating expenses for a company include rent, payroll, travel, utilities, insurance, maintenance and repairs, property taxes, office supplies, depreciation and advertising.

Is COGS Capex or OPEX?

Examples of CAPEX include physical assets, such as buildings, equipment, machinery, and vehicles. Examples of OPEX include employee salaries, rent, utilities, property taxes, and cost of goods sold (COGS).

What type of expense is COGS?

Cost of Goods Sold is also known as “cost of sales” or its acronym “COGS.” COGS refers to the cost of goods that are either manufactured or purchased and then sold. COGS counts as a business expense and affects how much profit a company makes on its products.