Finance & Metrics
COGS
Definition: Cost of goods sold; direct cost of products sold during a period.
In restaurants, COGS typically includes food, beverage, and packaging tied to sales. It excludes labor, rent, and marketing. COGS divided by sales equals food and beverage cost percentages when categorized correctly.
Accurate COGS requires consistent category mapping in the POS and accounting system. Comps, employee meals, and waste should be tracked, not buried.
COGS is the first half of prime cost before labor is added.
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