Is Operating expense is part of COGS



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Hi Binny,

Am I right in saying that Operating expense is part of COGS?

1 Answer(s)


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Unfortunately not :)
Lets assume you are running your own pizza company - the expense towards the pizza ingredients (cheese, vegetables etc) is the COGS. And other expenses like salary, electricity etc are COGS.
The formula is
Revenue - COGS = Gross Margin
Gross Margin - Opex = net Income
So you see, COGS and Opex are 2 different items.

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