Let's say that you are in the business of selling widgets. All the costs related to manufactureing, storing and selling one widget (referred to as a unit) would be the direct unit costs. Your direct cost of sales (also referred to as direct cost of goods or direct COGS) are all the costs related to the creation of your widgets. Your direct cost of sales may or may not be your total cost of sales. Usually this includes the cost of materials and direct labor costs, but excludes distribution and sales (the cost of getting your widgets to a retailer and get them sold).
total cost of sales may include indirect cost as well while direct cost of sales only included direct costs.
Gross Profit = Sales - Cost of Sales and Direct cost Net Profit = G.P - Indirect Expenses By Cyril Joseph
Difference between revenue from sales and cost of goods sold is called "Gross profit".
Sales is the revenue of company while cost of sales is the cost of goods which are used to manufacture the units of products for sales purpose
Direct cost of sales is that cost which directly identifiable with sales like purchases etc.
total cost of sales may include indirect cost as well while direct cost of sales only included direct costs.
Gross Profit = Sales - Cost of Sales and Direct cost Net Profit = G.P - Indirect Expenses By Cyril Joseph
Difference between revenue from sales and cost of goods sold is called "Gross profit".
Net Sales is sales less sales returns and cost of sales is all the direct expenses and overhead applied to whatever type of business you are talking about. Don't confuse Net Sales with Net Income (which is the bottom line of a business's income statement)
Sales is the revenue of company while cost of sales is the cost of goods which are used to manufacture the units of products for sales purpose
Direct cost of sales is that cost which directly identifiable with sales like purchases etc.
There is no difference between the cost of goods sold and cost of sales. Both are same.What if Cost of Sales relates to a service rather than a "good"? Does that not signify a difference? For example a cost of sales for a service would contain no starting and finishing inventory component as is described in some texts as a way of calculating cost of goods sold.
Direct cost is cost of product while direct costing is the process which study or accounts the direct cost allocation to products.
direct cost has direct relation with product manufacturing while indirect cost not and not identifiable with cost as well.
gross profit
Direct cost is that cost which is directly identifiable with production volume while direct costing is the method or process through which direct cost is allocated to production.
The margin as a percentage by which sales exceed cost of sales; it is calculated by dividing the difference between the two by the sales figure.