What is Cost Of Goods Sold Vs Inventory ?

Definition

Understanding how to calculate the cost of goods sold and inventory can be helpful when you're trying to manage your finances and figure out a plan for the future. The cost of goods sold includes the cost of materials required to make a product, such as labor, and any other costs related to getting the product made. Inventory refers to items that are on hand or in store for sale. To calculate the cost of goods sold vs inventory, subtract the cost of goods sold from inventory and divide by the number of units produced.