Which items are included in the cost of goods sold?

The cost of goods sold (COGS) typically includes the direct costs of producing the goods that a company sells during a specific period. This means it reflects all expenses directly tied to the manufacturing of those goods, such as raw materials, direct labor, and overhead costs associated with the production of the products that have been sold.

The correct choice highlights that COGS accounts for not just finished goods sold but also any significant losses related to those goods. This can include products that were stolen, damaged, or lost during the process, as they can ultimately impact the inventory available for sale and thus affect the overall COGS calculation. Understanding this aspect is key for business planning and accounting, as it directly influences profitability and inventory valuation.

The other options do not accurately reflect the components of COGS. The first option limits COGS to only products soldwithout considering the lost or damaged goods. The third option incorrectly defines COGS as only operational expenses, which do not encompass all costs related to the goods sold. The last option, stating none of the above, misses the definition of COGS entirely.