Certified Supply Chain Professional (CSCP) Practice Exam

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Study for the Certified Supply Chain Professional (CSCP) Practice Exam. Prepare with multiple choice questions, each accompanied by hints and explanations. Get ready to ace your exam!

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What does COGS stand for?

Cost of gross sales
Cost of goods sold
Capital of goods sold
Commodity of goods sales

The correct answer is: Cost of goods sold

COGS stands for Cost of Goods Sold, which represents the direct costs attributable to the production of the goods that a company sells during a specific period. This includes expenses like raw materials and direct labor involved in manufacturing the products. Understanding COGS is essential for accurately calculating gross profit, as it directly affects the profitability of a business. COGS is typically used in financial statements to reflect the expenses that are directly tied to the production of the goods sold, enabling businesses to assess their operational efficiency and pricing strategies effectively. By properly calculating COGS, companies can determine their true performance, manage their inventory effectively, and make informed strategic decisions regarding price adjustments or product offerings.