Recruiter's Glossary

Examples: Segment Reporting • Hedge Accounting • Accounts Receivable

COGS

Term from Accounting industry explained for recruiters

COGS, which stands for Cost of Goods Sold, is a fundamental accounting term that refers to all the direct costs involved in producing products or services that a company sells. Think of it as calculating all the money spent to create what a business sells - like raw materials, direct labor costs, and factory costs. This is different from other business expenses like advertising or office rent. Understanding COGS is crucial because it helps determine how profitable a company really is. You might also see it referred to as "Cost of Sales" or "Cost of Revenue" in job descriptions and financial reports.

Examples in Resumes

Reduced COGS by 15% through strategic supplier negotiations and process improvements

Developed automated Cost of Goods Sold tracking system for manufacturing division

Managed monthly COGS analysis and reporting for $50M product line

Typical job title: "Cost Accountants"

Also try searching for:

Cost Accountant Financial Analyst Management Accountant Finance Manager Manufacturing Accountant Inventory Accountant Product Cost Analyst

Where to Find Cost Accountants

Professional Organizations

Online Communities

Job Boards

Example Interview Questions

Senior Level Questions

Q: How would you improve a company's COGS tracking system?

Expected Answer: A senior professional should discuss implementing automated systems, establishing clear cost allocation methods, regular supplier reviews, and creating detailed reporting processes that help identify cost-saving opportunities.

Q: How do you handle variance analysis in COGS?

Expected Answer: Should explain how they compare actual costs versus expected costs, identify reasons for differences, and develop action plans to address unfavorable variances in materials, labor, or overhead costs.

Mid Level Questions

Q: What costs should be included in COGS calculations?

Expected Answer: Should explain direct materials, direct labor, and manufacturing overhead costs, while knowing which expenses (like marketing or administrative costs) should be excluded.

Q: How does inventory valuation affect COGS?

Expected Answer: Should discuss different inventory methods (FIFO, LIFO, weighted average) and how each method can impact COGS calculations and financial statements.

Junior Level Questions

Q: What is the basic formula for calculating COGS?

Expected Answer: Should explain that COGS = Beginning Inventory + Purchases - Ending Inventory, and be able to provide a simple example.

Q: Why is COGS important for a business?

Expected Answer: Should explain that COGS helps determine profitability, pricing decisions, and is crucial for financial reporting and business planning.