How to avoid mistakes when taking into account expenses in COGS?

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For marketing purposes, in order to avoid confusion and ultimately calculate the gross profit correctly (to assess the effectiveness of marketing activities), it is advisable to be guided by the answer to the question when assigning costs to COGS: "Would the company have incurred the costs included in COGS if it had not provided this product or service to the client?"

If the answer is yes, then do not include these armenia telegram number database costs in COGS, they should be attributed to the fixed costs of the enterprise, and if the answer is no, these costs would not exist - then you are dealing with COGS.

Example of cost accounting in COGS.
For example, for the production of hosiery, yarn was purchased that was used on the company's long-standing machines. Each pair of hosiery is packed in film, a cardboard insert is put into the packaging, and full-color paper packaging is used.

The products are manufactured in the workshop, the company pays utility bills monthly (on days when the machines are not working, the workshop continues to perform other tasks), and a cleaning lady washes the floor in the workshop every day.

Which of the listed enterprise expenses should be classified as COGS?

The COGS will definitely include expenses for yarn, packaging (all the listed types), but the salary of the cleaner, utility costs and depreciation of the machines will not be taken into account in the COGS, since the company bears these expenses even in cases where it does not produce hosiery.