Cost of Revenue vs. COGS
Basis |
Cost of Revenue |
Cost of Goods Sold (COGS) |
---|---|---|
Definition |
Encompasses all costs directly tied to revenue generation. |
Specifically focuses on direct costs associated with the production or purchase of goods. |
Scope |
Broader, covering a wide range of expenses tied to revenue generation. |
More focused on the immediate costs related to goods sold. |
Components |
Includes operating expenses beyond production costs, such as marketing and distribution. |
Limited to direct production or acquisition costs like raw materials and labor. |
Usage |
More commonly used in service-oriented industries. |
Predominantly used in manufacturing and product-centric industries. |
Calculation |
Comprises all costs associated with generating revenue. |
Concentrates on the direct costs related to goods sold. |
Tax Implications |
May include non-deductible expenses related to revenue generation. |
Typically includes tax-deductible expenses associated with goods sold. |
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