COGS & Fixed Costs Confusion


1 Answer(s)


Yes Shoaib. Salaries are an expense that all companies have. However in services companies like Infosys salary is the biggest component of the revenue COGS. To increase revenue Infosys needs to proportionally increase headcount.

However for Dominos the biggest component of revenue is raw materials and ingredients. To increase revenue Dominos does not have to necessarily increase headcount proportionally. Many other options like increase store utilization etc can be employed.