Does COGS include salaries?

In the video when we are comparing the COGS of Infosys and Domino, we are saying that salaries cost form a small part of COGS. But when we had built basic model for pizza restaurant, we had taken salaries cost under operating expenses. Where should it be taken? Kindly clarify. thanlks

1 Answer(s)


In ideal case salary should not be part of COGS and it should be treated as operating expense. COGS simply indicates how much money company has spend on raw material to make its final product such as plane, router, car etc. however, in case of Infosys it does not have any product and it is service based company to offer engineering services to its client so adding engineers' salary to COGS make sense.

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