<Ul> <Li> </Li> <Li> </Li> <Li> </Li> </Ul> <P> Cost of goods sold (COGS) refers to the carrying value of goods sold during a particular period . </P> <P> Costs are associated with particular goods using one of the several formulas, including specific identification, first - in first - out (FIFO), or average cost . Costs include all costs of purchase, costs of conversion and other costs that are incurred in bringing the inventories to their present location and condition . Costs of goods made by the businesses include material, labor, and allocated overhead . The costs of those goods which are not yet sold are deferred as costs of inventory until the inventory is sold or written down in value . </P> <P> Many businesses sell goods that they have bought or produced . When the goods are bought or produced, the costs associated with such goods are capitalized as part of inventory (or stock) of goods . These costs are treated as an expense in the period the business recognizes income from sale of the goods . </P>

Does cost of goods sold include fixed and variable costs